No reason to be concerned about Qatar's currency, says finance minister

No reason to be concerned about Qatar's currency, says finance minister
Qatar's finance minister says there is no reason to be concerned about the Qatari riyal, noting the country can easily defend its economy and currency against the Gulf blockade.
3 min read
12 June, 2017
Emadi says Qatar can easily defend its economy and currency despite the blockade [AFP]

Qatar can easily defend its economy and currency against a blockade imposed by other Arab states, its finance minister said on Monday, as the Gulf diplomatic dispute entered its second week.

"Our reserves and investment funds are more than 250 percent of gross domestic product," Ali Sherif al-Emadi told CNBC television in an interview broadcast on Monday.

"I don't think there is any reason that people need to be concerned about what's happening, or any speculation on the Qatari riyal."

In the biggest diplomatic crisis in the region in years, Saudi Arabia, Bahrain and the United Arab Emirates, plus Egypt and Yemen, announced last week they were cutting all ties with Qatar, accusing it of allegedly supporting extremism and having good ties with Saudi Arabia's regional-rival Iran.

The Arab countries closed air, sea and land links with Qatar, barred the emirate's planes from their airspace and ordered Qatari citizens out within 14 days.

The sanctions have somewhat disrupted flows of imports and other materials into Qatar, and caused many foreign banks to scale back their business with the country.

However, Emadi predicted the countries isolating Qatar would share in the economic consequences of the blockade.

"A lot of people think we're the only ones to lose in this," he said.

"If we're going to lose a dollar, they will lose a dollar also."

Emadi added that despite the blockade, the energy sector and economy of the world's top liquefied natural gas exporter were essentially operating as normal.

"We have not missed a single shipment during this time and we have been doing this for the last 20 years," the minister said, adding that it was "still business as usual in the oil and gas industries".

He also said there had not been a serious impact on supplies of food or other goods.

Qatar can import goods from Turkey, the Far East or Europe and it will respond to the crisis by diversifying its economy even more, he told CNBC.

On Sunday, the Qatar Ports Management Company (Mwani) announced the opening of two new shipping services between Qatar and Oman to help break the ongoing blockade.

If we're going to lose a dollar, they will lose a dollar also.
- Ali Sherif al-Emadi

"In light of the recent developments in the region, Mwani Qatar and its partners have ensured the business continuity of its ports and shipping operations in and out of Qatar to mitigate the impact of any action that would affect the imports and exports to and from the country," a spokesperson for Mwani said in a news conference.

Asked whether Qatar might need to raise money by selling off stakes in large Western companies held by its sovereign wealth fund, Emadi indicated this was not on the cards at present.

"We are extremely comfortable with our positions, our investments and liquidity in our systems," he said.

In a statement released on the state-run Qatar News Agency on Monday, Qatar's Central Bank governor Sheikh Abdullah bin Saud Al Thani dismissed concerns over liquidity levels.

"The banking and banking transactions and procedures in the State of Qatar continue to be normal, both at the level of local financial transactions and between the Qatari banking sector and foreign banks," the statement read.

It added that the governor "stressed that the liquidity levels in the Qatari banking sector are good and meet all customer requirements".

Despite lowering Qatar's long-term rating by one level to AA- last week, and putting it on negative watch after concerns for the Gulf state's finances, S&P Global Ratings said on Sunday that Qatari banks are strong enough to survive the pullout of all Gulf money and a quarter of their other foreign holdings.

In a worst case scenario, only two unidentified lenders would have to dip into their investment securities portfolio, S&P concluded.