Qatar Economic Outlook Issue Number 13

Impacts on Interest Rates 
Most countries have used monetary policy 
tools, foremost of which are the interest rates, 
to mitigate the consequences of imposing 
measures to contain Covid-19 on their 
economies. In March 2020, QCB adjusted 
the QMR tool, which is the overnight lending 
and deposit interest rate, to 2.5% and 1%, 
respectively, and they remained so until the 
writing of this report in December 2021, as 
Figure (2-11) indicates. Their stability at such 
low levels reflected the stability of the 
monetary policies of the US Federal Reserve 
due to the pegging of the Qatari riyal 
exchange rate to the dollar, where the 
average Fed rate during the period March 
2020 – November 2021 was about 0.11%. 
This is done in order to be vigilant against any 
negative repercussions at the local level, 
namely, the outflows and inflows to and from 
the Qatari banking system.
Similarly, the QCB has adjusted the 
repurchase rate (Repo) to 1% since March 
2020, which encouraged borrowing from 
QCB during Q1 of 2020 by about QR 29.9 
billion, compared to about QR 14.5 billion net 
borrowed in 2019. However, banking data 
indicate that Repo loans have been paid 
since April 2020, and that holders were not 
resorting to the QCB for further borrowing, as 
the net repayment during the period (April - 
December 2020) amounted to about QR 28.8 
billion; thereafter a robust repayment process 
continued during the period (January - 
November 2021), as the net repayment 
amounted to about QR 20.5 billion. 
Since the activities of Qatari commercial 
banks overlap with the activities of 
Figure 2-11:
 
Monetary Policy Rates (%) 
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0.0
0.5
1.0
1.5
2.0
2.5
2017
2018
2019
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
(N
ov
)
Annual
2020
2021
US Fed Fund rate
QCB Deposit rate
Repo at QCB (R-Axis)
QCB Lending rate (R-Axis)
Source: QCB and US Federal Reserve website 
(https://fred.stlouisfed.org/series/FEDFUNDS), Jan 
2022

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