Doha: Qatar has taken extreme measures to limit any possible economic damage that would emerge from the impact of global pandemic COVID-19. The measures taken to support private sector goes to an extent never seen before in the country’s capital system.
The country’s economic response to the pandemic has taken the form of a QR75bn stimulus plan, in addition to injecting QR10bn into the stock market.
The Qatar Central Bank’s (QCB) Tuesday’s directives to the banks were another shot in the arm for the country’s private sector. Market experts with whom The Peninsula spoke to, expressed hope that the QCB decisions will help take over the pay rolls of some really struggling companies, so that workers don’t get laid off. Experts said with the government’s timely intervention, many companies would be able to exit their `frozen status` immediately.
Bashir Al Kahlout, Economic Consultant and Director, Al Byraq Centre for Economic and Financial Studies termed QCB’s Tuesday announcement as “literally a bailout package” not only for the struggling private companies, but for the entire banking system. The six-month grace period provided to the private sector for the repayment of their loans is a big relief to the struggling companies. Banks can benefit from QCB’s decision to bring down the Repo rate to zero, he said.
Government’s decision to inject QR10bn into Qatari bourse is another major step that infused enormous amount of confidence in the market. Al Kahlout said the decision will help push the market up.
Meanwhile, QCB’s Tuesday announcement lifted the banking stocks yesterday. The sector index jumped by 3.93 percent, with QNB rising the most by 4.7 percent.
Under the stimulus package, the aviation, hospitality, food and transportation are some of the priority sectors, believes a Doha-based economist.
“The food sector is the worst hit by the global pandemic. The cargo charges have increased by two to three folds. With the global supply chain got disrupted, the sector is experiencing huge volatility in prices. I think government will certainly step in to fix the system,” he said.
However, enquiries revealed that certain banks are yet to figure out their operation part, related to QCB’s directives. An SME entrepreneur told this paper that his bank is still confused whether the grace period is for the loan repayment or for penal interests. Earlier, responding to Qatar’s economic response to the global pandemic, two top market experts told this paper that the government was moving decisively to address the unprecedented effects and consequences of the crisis. Akber Khan, Senior Director, Asset Management Group, Al Rayan Investment said the government’s stimulus package is equivalent to 10 percent of Qatar’s GDP.
Rizwan Yaseen, KPMG in Qatar, Audit Director said the Government’s targeted measures will benefit small businesses and private sector’s cash flow management in this unprecedented situation. “Taking decisive measures like this one is key to ensuring a safe and stable environment, so we praise Qatar’s leadership for their swift efforts to support business community.”.
Yaseen noted that the stimulus package is the equivalent of an economic flu shot to help ward off the adverse financial impact of coronavirus.
QCB decision reflects commitment to support banking system: KPMG
Qatar Central Bank’s (QCB) circular dated March 22, 2020, issued to Banks in Qatar, is an another measure taken by the leadership of the country to ensure the financial wellbeing of the general public and the stability of the economy during these difficult times, Kashif Parvez (pictured), Audit Director, KPMG in Qatar told The Peninsula, yesterday.
Parvez commented: “Postponement of outstanding loan installments and interest on loans held by the affected sectors would certainly allow the affected organisations to recover from the losses incurred during one of the most devastating pandemics ever seen. Also, providing a Repurchase window (Repo) to Banks at a zero cost demonstrates QCB’s unconditional commitment to support the Banking Sector of the Country. It is commendable how the Government has dealt with this grave situation so smoothly and hopefully we will soon see an end to it.”
SOURCE: THEPENINSULAQATAR