Qatar Opens Installment Delay and Adds Liquidity, Banks Are Prepared to Face the Impact of the Iran Conflict

JAKARTA - The Central Bank of Qatar has begun to prepare anticipatory steps to mitigate the impact of the Iran conflict on the financial sector. According to a report by Arab News quoted on Tuesday, March 31, banks in Qatar are now allowed to postpone the principal and interest payments on loans for up to three months for affected customers.

The policy was taken when conflicts involving the United States, Israel, and Iran continued to add uncertainty to the regional market. For Qatar, the risk is not only about market sentiment, but also about maintaining banking liquidity so that pressure does not spread to credit and cash flow.

In its statement, the Central Bank of Qatar said that loan payment delays could be granted in accordance with the internal policies of each bank and applicable supervisory guidelines. The monetary authority also added liquidity support to keep the financial system stable.

Arab News reported that the Central Bank of Qatar assessed that the banking conditions were still strong. Liquidity is said to remain solid, bank capital levels are well above regulator requirements, and reserves are still considered thick enough to cover credit risks.

The central bank also stated that banks in Qatar still hold large liquidity, both in local currency and foreign currencies. The available funds are said to be sufficient to serve customer needs, keep market activity normal, and face short-term funding pressures if the situation worsens.

However, Qatar did not stop at the assessment that its banking system was still safe. The central bank also opened a Qatar riyal repo facility, namely a short-term liquidity loan for banks with collateral of eligible securities, as well as new term repos of up to three months. This step is prepared so that banks are more free to manage cash flow during periods of uncertainty.

Another step taken is to cut the minimum required deposit giro to 3.5 percent from the previous 4.5 percent. The goal is clear: release more liquidity into the banking system.

Still according to Arab News, Qatar's move is in line with the response of other Gulf countries. Earlier this month, the Central Bank of the United Arab Emirates also issued a financial resilience package to help banks face pressure from regional conflicts.

Qatar considers its banking system to be still strong, but the impact of regional conflicts remains anticipated. Therefore, the central bank added an early liquidity cushion or liquidity reserve to prevent market pressures from spreading further into the financial sector.