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Sat 21 Mar 2009 09:17 AM

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Qatar central bank buys $1.79bn worth of bank portfolios

The gov't has bought up investment portfolios to boost liquidity and encourage lending. 

Qatar has bought QR6.5bn ($1.79bn) worth of listed banks' investment portfolios as part of a move to boost liquidity and encourage lending, the country's central bank said.

On Friday, local Qatar newspaper Al Raya quoted the central bank governor Sheikh Abdullah bin Saud Al Thani as saying the government had completed the purchase of the banks' portfolios on Thursday.

Later on Friday, a central bank spokesman confirmed the government had bought QR6.5m rials worth of banks' investments as part of a plan announced earlier this month.

The move follows an announcemnt by the the Gulf Arab oil and gas exporter on March 10 that it would ask its sovereign wealth fund to buy the portfolios in order to provide liquidity to facilitate lending, causing bank shares to surge.

The central bank coordinated with the Qatari banks to determine which investments they wanted to sell to the government, Sheikh Abdullah was quoted as saying by Al Raya.

Several Gulf Arab countries have devised policies to limit the impact of the global financial crisis on their economies which have so far been buffered by savings from a six-year oil price boom.

Qatar said in October it would buy between 10 and 20 percent of listed banks' capital to boost investor confidence in a $5.3bn programme through the wealth fund. (Reuters)

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