Qatari Riyal now trading close to fixed peg rate, says Qatar Central Bank

A lot of attempts had been made in the past to destabilise the rate of Qatari Riyal against the US Dollar in the past, but they have all failed.

The Qatar Central Bank has said that the Qatari riyal is now trading close to its fixed peg rate, in both off-shore and on-shore forex market, and that confidence has been regained after the ‘speculative attack’ in the offshore market since the blockade, reported Gulf Times.

QCB has adopted the exchange rate policy, through fixing the value of the Qatari riyal against the US dollar at a rate of QR3.64 per dollar as a nominal anchor for its monetary policy.

“The peg has always been highly credible. The targeted peg was officially authorised by Emiri Decree No 34 of 2001 issued in July, substituting the de jure exchange rate policy of pegging to the SDR that was in effect since 1975,” the QCB said in its ninth Financial Stability Review.

According to the central bank, commercial banks domestically trade the dollar on the basis of price determined by QCB. Nonetheless, commercial banks add a small margin to the QCB fixed price when dealing with the public.

Otherwise, commercial banks trade other currencies based on QCB determined exchange rate of QR against the USD and market-determined exchange rate of a given currency against the dollar.

“Qatari riyal was subject to speculative attack in the offshore market since the embargo. As per the data provided by Reuters, the exchange rate reached the highest of 3.865 in November 2017,” the QCB said in its latest report, which is a comprehensive review of the country’s financial system in 2017.

“Through appropriate communication strategy, the confidence in the market is regained and the offshore market rate came back to normalcy since December 2017,” QCB said.