DOHA: Qatar’s commitment to invest heavily in infrastructure, ahead of the 2022 Soccer World Cup, has surged its external debt in the past three years. The country’s external government borrowing has more than tripled since 2009, reaching QR87.8bn in 2011-2012, up from QR28.3bn in 2008-2009.
The gush in external debt has increased Qatar’s reliance on global finance volatility and uncertainty. Reducing the vulnerability to international exposure has become an important policy agenda of Qatar, Investment Bank SICO said yesterday.
To curtail increasing liquidity in the system, and the increasing demand for credit, the Qatar Central Bank (QCB) is looking to build a liquid domestic debt market, which serves both government funding requirements and restrains the effects of excess liquidity in the system.
The Qatari government issued government bonds worth QR 50bn in January 2011, including QR33bn through Islamic Sukuk instruments, in addition to other government securities which drew surplus liquidity from the system. A large percentage of the Qataris government’s external debt, an estimatedQR87.7m, is maturing post 2017. As long as Qatar’s balance sheet continues to grow, along with the running budget surpluses, debt roll-over risk is highly unlikely and the government will be able to refinance its debt or meet maturities.
Read more: http://thepeninsulaqatar.com/qatar-business/225492-qatar-looking-to-boost-local-debt-market.html
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