Money supply in Qatar surged almost 53 percent in the year to March, central bank data showed, as the Gulf Arab state struggles to mop up liquidity to fight the region's steepest rate of inflation.
M2 jumped to 139.99 billion riyals ($38.43 billion) on March 31 compared with 91.56 billion dirhams a year earlier, the central bank said in a report on its website.
Investments in time deposits almost doubled over the period to 66.76 billion riyals at the end of March compared with 36.20 billion riyals a year earlier, while quasi money grew 52.7 percent to 89.08 billion riyals, the data showed.
Money supply growth is a key driver of inflation, which hit 14.75 percent in Qatar in the first quarter, just off a record and the highest rate in the world's biggest oil-exporting region.
Qatar, the world's largest exporter of liquefied natural gas, held 1.35 billion riyals of gold at the end of March, up from 648.4 billion riyals a year earlier, the central bank said.
The value of gold holdings of the central bank, which said in 2006 it wanted to diversify its foreign exchange reserves away from the dollar, increased about 10-fold last year.
Deposits in foreign currencies were almost steady at 22.31 billion riyals in March, compared with 22.15 billion riyals the previous year.
Total domestic credit rose 60.2 percent in March to 164.96 billion riyals, the central bank added.
Gulf Arab oil producers are looking for ways other than revaluing their dollar-pegged currencies to bring galloping inflation under control.
Qatar's central bank said in March it would hold monthly auctions of certificates of deposit to mop up excess funds in an effort to bring down inflation and guide interest rate policy.
It has also raised bank reserve requirements three times since December to force banks to keep more money in their vaults and give them less to lend as interest rates tumble.
The peg has forced Gulf states to track seven US interest rate cuts since September to maintain the relative value of their currencies. (Reuters)
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