Qatar Says It Has Enough Reserves to Meet Commitments

On Monday, Central Bank Governor Sheikh Abdullah Bin Saoud al-Thani told CNBC that Qatar has US$340 billion in reserves that could help the country weather the isolation imposed by its Arab neighbors.

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"This is the credibility of our system, we have enough cash to preserve any ... kind of shock," he told the news channel in an interview.

Reportedly, Qatari stocks have weakened and the riyal has been volatile since Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt cut diplomatic and transport ties June 5.

But, Al-Thani insists that the stability of the Qatari riyal will "continue for the future."

Saudi, UAE, and Bahraini banks have largely shelved any new business with Qatar because of guidance from their respective central banks, and other foreign banks have also followed suit.

In May, 36 percent of Qatar's commercial banks' total liabilities were to foreigners, including the six-nation Gulf Cooperation Council.

However, according to al-Thani, if the conflict escalates and money continues to flow out, the country's banking system has enough buffers to "meet all the requirements."

He explained that the central bank has US$40 billion in reserves, plus gold, while the Qatar Investment Authority's sovereign wealth fund has US$300 billion in liquidatable reserves.

Economists, too, agree there is some financial cushion and that the world's top liquefied natural gas exporter likely has plans to boost its gas output as well as add new transport routes.

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Al-Thani did, however, admit that the central bank has noticed fund outflows from some non-residents, but reassured that these amounts were not particularly significant.

Less than US$6 billion left Qatar over the last month, he pointed out.

"We have enough CDs (certificates of deposits) and Treasury Bills and Treasury Bonds in hand on the asset side of the banking sector that provides them with the liquidity," he said. Al-Thani said long-term contracts in the gas and oil sectors were not seeing any disruptions.

Earlier this month, rating agency Moody's Investors Service changed the outlook on Qatar's credit rating to negative from stable, citing economic and financial risks arising from the ongoing dispute between Qatar and the Saudi-led alliance.

 

U.S. President Donald Trump, who took credit for the diplomatic row between Qatar and its neighbors, has been critical of the Gulf country on social media.

“So good to see the Saudi Arabia visit with the King and 50 countries already paying off,” he tweeted on June 6. “They said they would take a hard line on funding, extremism, and all reference was pointing to Qatar.”

In contradiction, Trump's son-in-law, Kushner reportedly tried and failed to secure a US$500 million loan from Qatari billionaire businessman, Sheikh Hamad bin Abdullah Al-Thani.

Sources told the Intercept that in 2015, Kushner and his father approached HBJ to convinced him to invest US$500 million in a financially-strapped Kushner Companies property.

HBJ agreed on the condition that Kushner source a portion of the money for the multi-billion-dollar project.

 

For the shortfall, the Trump adviser's company approached Chinese insurance company Anbang — which agreed to a US$4 billion construction loan to develop the property.

The company in question, a building at 666 Fifth Avenue in New York, was purchased for US$1.8 billion — a record-setting deal at the time. According to the New York Times, the building has not generated enough to pay its debts in several years, forcing Kushner Companies to seek loans.

Weeks following the agreement with the Chinese firm, amid concerns of conflicts of interest, Anbang pulled out of the arrangement — causing the Kushner Companies-HBJ deal to appear to fall through.

Soon after, a diplomatic spat involving the six Gulf region countries severing-reducing ties with Qatar happened.

It has been alleged that Kushner, who serves as a senior adviser to the president, was integral in his father-in-law's push for the crackdown on Qatar by his Saudi alliance.

A source has revealed that the deal between HBJ and the Kushners is not dead, but has simply been placed on hold, possibly to be revisited, triggering allegations that strongarming is responsible for the Trump-influenced shutout of Qatar by its neighbors.

Kushner Companies did not respond to the Independent’s request for comment.