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Wed 14 Jan 2009 05:17 PM

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Qatari money supply growth up at 43% in Sept

Growth in domestic credit continues to surge according to Qatar's central bank.

Qatari money supply growth rose slightly in September to 43.1 percent from 42 percent in August, while growth in domestic credit continued to surge, central bank data showed on Wednesday.

Money supply, as measured by M2, rose to 152.27 billion riyals ($41.80 billion) on Sept. 30, compared with 106.41 billion riyals a year earlier, the central bank said in a quarterly bulletin received by Reuters on Wednesday.

M3, the broadest measure of money circulating the Qatari economy, fell slightly to 212.16 billion riyals in the third quarter from 213.15 billion riyals at the end of June, the data showed.

Inflation and money supply growth - which had galloped to record levels earlier this year - are easing across the Gulf Arab region due to a global credit crisis. In Saudi Arabia, money supply growth slowed to 19.2 percent from 20.2 percent a month earlier.

Money held in Qatari bank time deposits in September rose to 77.4 billion riyals, up 0.84 percent from the month earlier and 58.6 percent on the year earlier, the central bank said.

Currency in circulation grew 13.7 percent in the month to Sept. 30 to 5.76 billion riyals, while month-on-month deposit funds eased 0.4 percent to 44.99 billion riyals.

Total domestic credit in Qatar grew 10.4 percent quarter-on-quarter to 201.04 billion riyals at the end of September - up 37.4 percent since the beginning of 2009.

Private sector credit rose 39.4 percent in the first nine months to 153.97 billion riyals.

Inflationary pressures across the region are easing after oil prices tumbled more than $100 a barrel from record levels above $147 a barrel in July.Qatari inflation - the highest in the Gulf - slipped to 15.81 percent in the third quarter from a record 16.59 percent in the second quarter.

Unlike its neighbours in the Gulf, Qatar has kept interest rates steady as central banks across the world lowered rates since October, a move apparently targeted at combating inflation.

The Qatar central bank's net foreign assets fell to 39.15 billion riyals in the third quarter from 45.94 billion riyals at the end of June. Its gold holdings rose to 1.26 billion riyals in September from 1.21 billion a month earlier.

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