Qatar money supply eases

Money supply growth drops to 41.9% in year to August from 45.2% a month earlier, official data shows.
Qatar money supply eases
By John Irish
Tue 25 Nov 2008 12:07 PM

Qatari money supply growth eased in the year to August to 41.9 percent from 45.2 percent a month earlier on a slower expansion of money held in bank demand deposits, official data showed.

Money supply, as measured by M2, fell to 150.8 billion Qatar riyals ($41.42 billion) on Aug. 31 compared with 106.2 billion riyals a year earlier, the Qatar central bank said in a quarterly bulletin received by newswire Reuters late on Monday.

Annual money supply surged by more than 50 percent in each of March, April and May, as speculators piled into Gulf Arab currencies on bets some oil producers might revalue their dollar pegs to combat soaring inflation.

Bets receded in the summer as the dollar recovered on global markets and Gulf states insisted they would not revalue their currency as they prepare for monetary union.

Growth in money supply is one indicator of future inflation. Qatari inflation hit a record 16.6 percent in the second quarter, the highest level in the Gulf Arab region.

August money supply eased due to a decline in funds held in demand deposits to 45.2 billion riyals from 46.6 billion riyals a month earlier.

Money held in demand deposits surged 72.8 percent in the year to June while time deposits soared 60.7 percent to 72.79 billion riyals.

Qatar, the world's largest exporter of liquefied natural gas, held 1.2 billion riyals of gold at the end of August, up from 976.3 million riyals a year earlier, the central bank added. (Reuters)

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