| DOHA/DUBAI, March 16
DOHA/DUBAI, March 16 Qatar may buck the trend as
the Gulf's rich oil exporters hike interest rates in response to
U.S. monetary tightening, but Doha's strong financial position
means its currency should escape major pressure, commercial
bankers said on Thursday.
After the U.S. Federal Reserve raised rates by 0.25
percentage point on Wednesday, the central banks of Saudi
Arabia, the United Arab Emirates, Kuwait and Bahrain followed
suit within 90 minutes. Oman had already allowed its official
rate to drift up in recent months.
They were acting to head off any downward pressure on their
currencies, which are pegged or closely linked to the U.S.
By midday on Thursday, however, Qatar - which pegs its riyal
at 3.64 to the dollar - had not announced a rate hike and had
given no indication it was considering one. Central bank
officials in charge of policy could not be reached for comment.
Some commercial bankers said they still expected a Qatari
hike later in the day or in coming days. Central bank governor
Sheikh Abdullah bin Saud al-Thani is visiting Kazakhstan, and
some suggested this might have delayed Qatari decision-making.
"The expectation is that they will do it, as the others
have. We'll know very soon," said the managing director of a
Qatari bank, declining to be named because of political and
Several others, however, said Qatar might see no need to
follow U.S. policy. Doha was slower than most central banks to
cut rates during the global financial crisis, so it now has a
relatively high official rate structure that can accommodate
small rises in U.S. rates for now.
Also, Qatar is one of the Gulf's financially strongest
states; its sovereign wealth fund has several hundred billion
dollars of assets that could be deployed if necessary to head
off any attack on its currency.
One-year dollar/riyal forwards barely moved on
Thursday morning, suggesting the uncertainty about policy was
not causing banks to take many fresh positions.
"Since 2008, Qatar's monetary policy has been largely
independent of the U.S., despite maintaining a pegged currency,"
said Akber Khan, director of asset management at Qatar's Al
He noted the current official overnight lending rate of 4.75
percent was only half a percentage point below its level 10
In December 2015, after the Fed raised rates for the first
time in nine years, Qatar kept its official rates flat. But Doha
did imitate the U.S. rate hike in December 2016.
"The Qataris have increasingly been looking to their own
monetary policy. Even at the time of the last U.S. hike, they
had some hesitation about aligning themselves to the U.S. and
the other Gulf countries," said a treasury banker in the United
"Qatari monetary agency is not really transparent, so it is
not clear what they plan to do now."
(Writing by Andrew Torchia; Editing by Hugh Lawson)