QATAR: Central bank issues QR4bn bonds

Qatar’s central bank yesterday issued QR1bn ($300mn) of local currency sukuk and QR3bn of local currency conventional bonds, as part of an adjustment of monetary policy and in order to help commercial banks meet Basel III liquidity requirements.

Local currency debt will be issued every quarter, half with three-year maturities and half with five-year, the central bank said in a statement. It did not give specific dates or sizes for future issues, saying they would be announced later.

“The aim of issuing these bonds is to develop monetary policy and the implementation of a mechanism of co-ordination between monetary and fiscal policy and support the strength of the banking system and financial and market tools,” it said.

A senior commercial banker in Qatar said yesterday’s issuance was allocated directly to local banks. Pricing was not immediately known.

In January, the International Monetary Fund’s mission chief for Qatar told Reuters that authorities planned debt issues to build a domestic sovereign yield curve, as part of the country’s efforts to develop a local currency debt market.

The issues will help Qatar, the world’s top liquefied natural gas exporter, manage excess liquidity in the banking sector that has been created by rapid economic growth; liquidity may be boosted further by the country’s massive infrastructure building programme, which is due to accelerate this year.

Qatar has issued local currency bonds before. In January 2011, the central bank issued a QR50bn, three-year bond directly to local banks as a step to drain excess money from the banking system.

In addition, the central bank launched monthly auctions of 91-, 182- and 273-day Treasury bills in May and August that year to soak up excess funds. As a result, available liquidity dropped to a mere QR5.8bn at the end of 2011 from QR73.2bn a year before, the central bank has said.

QIIB shareholders approve sukuk plan

International Islamic (QIIB) shareholders’ have given approval for a $2bn sukuk, which the bank can issue within a year to meet funding requirements, if it chooses to do so.

Speaking to Gulf Times after the bank’s ordinary general assembly meeting at the Ezdan Tower yesterday, CEO Abdulbasit A al-Shaibei said the bank had still not decided on the timetable for the proposed sukuk. “The sukuk issuance will be based on market conditions…especially in the international market. A lot of elements play in the decision behind sukuk issuance,” al-Shaibei said. But, he said, the sukuk issuance might not happen in the second or third quarter.

The QIIB CEO said the programme approved by shareholders enabled the bank to issue sukuk in tranches.

“We don’t have to take it at one go,” he said

Source: Caye Global News, Gulf Times/Reuters 


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