Qatar borrows 47 billion riyals from the local market

  • Qatar Central Bank

After marking its first deficit in 15 years in 2016 due to the drop in oil prices, Qatar resorted to relying heavily on public debt to finance the deficit, especially with Qatar's commitment to implement the 2022 World Cup hosting projects.

Domestic debt instruments issued by the Qatar Central Bank this year amounted to 46.5 billion riyals ($12.7 billion), compared to 27.9 billion riyals ($7.6 billion) last year, an annual increase of 66.3 percent.

The rise in Qatar's debt instruments comes despite Qatar's projected fiscal deficit of 39.1 percent this year to 28.3 billion riyals, from 46.5 billion riyals in 2016. The Qatari government issued $9 billion as dollar bonds in May last year.

The Central Bank's issues this year varied between government bonds, Islamic sukuk and treasury bills.

Under Qatar's public debt law, the Qatari Ministry of Finance is allowed as a government representative to borrow directly from local and international banks and to take the necessary measures to issue public debt securities and Islamic securities in the amount of $10 billion.

On the other hand, the volume of Qatar Central Bank's issuance of local government bonds increased by 61% this year, with bonds amounting to 18.47 billion riyals, compared to 11.47 billion in 2016.

The Central Bank made 3 issues this year, distributed over 10 segments, bringing the average value per share to about 1.85 billion riyals.

Bonds are defined as a long-term public debt instrument used by countries to finance the budget deficit.

As for Islamic Sukuk, the value of the Central Bank's issuance during the current year increased by 169.4% to 15.4 billion riyals compared to 5.7 billion last year.

According to the Central Bank of Qatar, in 2017, only two issues were distributed on 8 segments, with an average value of 1.9 billion riyals per segment.

Sovereign Islamic instruments are a state-of-the-art debt-raising tool used to bridge deficits and prove ownership rights to their holders in assets.

The central bank's treasury bills in 2017 did not differ significantly, with a total value of 16.9%.

The total value of the Central Bank's issuance of treasury bills in the current year amounted to 12.6 billion riyals, while in 2016 it issued 10.7 billion riyals.

Issuance of permits in the current year are 11 issues distributed over 30 segments, an average of 420 million riyals per segment.

Treasury bills are short-term debt instruments issued by the government for borrowing, providing short-term liquidity of between 3, 6 and 12 months and used by central banks to influence the volume of money supply and purchasing power offered in circulation.

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