Qatar Central Bank Working To Issue Digital Currency: Govern...| MENAFN.COM

Saturday, 02 July 2022 02:21 GMT

Qatar Central Bank Working To Issue Digital Currency: Governor


(MENAFN- The Peninsula) Lani Rose R Dizon | The Peninsula

Doha: The Qatar Central Bank (QCB) is currently in the foundation stage of issuing a central bank digital currency (CBDC), as more countries across the world are considering to launch their CBDC amid massive digital transformation in the financial sector.

Speaking at the session on 'The Inflation Test' at the Qatar Economic Forum, Powered by Bloomberg, yesterday, QCB Governor H E Sheikh Bandar bin Mohammed bin Saoud Al Thani said the central bank is working to find the right technology and platform to issue Qatar's CBDC, a virtual money created by a central bank which is also considered digital form of a country's flat currency.

“Many central banks are now considering to issue CBDC, and we are not an exception of that. But we are still in foundation stage. We are evaluating the pros and cons of issuing CBDC and to find the proper and the right technology and platform to issue our CBDC,” the QCB Governor said.

Speaking about crypto technology, the Governor added:“Currently, crypto are a technology innovation. It might take us to new era of fast, cheap, and more accessible financial services. However, those crypto assets which are not underlined by monetary authority might be less credible”.

During the interview session, the QCB Governor said that there will be no changes in Qatar's monetary and exchange rates policy, and reiterated the central bank's diversified portfolio, making it more flexible to navigate global crises.

Asked on whether the central bank was anticipating to move to a more flexible peg, the Governor said:“Our monetary and exchange rate policy is working well for our economy. Also, the IMF recently in their report highlighted that exchange rates for GCC remain stable. We are not going to see any changes to our exchange rates policy. Also, we are seeing an inflow of capital to Qatar Stock Exchange market. And this is an approval of the effectiveness of our policy”.

The Governor added that the central bank has the tools to contain inflation, with the approach of the FIFA World Cup Qatar 2022.

“We have a different economic situation. We have been investing in our infrastructure for the last 10 years for the preparation for the World Cup. We have economic activities different than the rest of the GCC countries. We are going to host a major event this year. And this event will boost the activities in Qatar. It is normal that we have a little bit higher interest rate. Our aim is to contain the inflation in Qatar, and we have the tools to do so,” he added.

The Governor stressed that the QCB has a well-diversified portfolio, with diversification in Europe, US, and the Far East.“There are different currencies in our portfolio, and this has always been our strategy, to diversify and not to depend on one currency before all of these global incidents (war in Ukraine) happened. And we will continue to do so. We are very confident about our portfolio,” he said.

Giving forecast in the financial market, the Governor said a stagflation was possible this year, followed by a recession by 2023.

He added:“We have increased the interest rates twice this year, in total of 1.5 percent. We have inflation of 5.18 percent in Qatar. The effectiveness of our monetary and exchange rate policy is benefiting us. We have witnessed an inflow of capital recently, which approved our monetary and exchange rate policy. We act to contain the inflation in Qatar. And we believe that we are aligned with US as well. So we expect that to increase interest rate you contain inflation”.

 

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