Business | Banking
Qatar money supply shrinks, cooling inflation
Qatar's M2 money supply, an indicator of future inflation, contracted 4.5 per cent in May after shrinking 5.7 per cent the previous month, the central bank said.
- Bloomberg
- Published: 22:33 July 29, 2009
Doha: Qatar's M2 money supply, an indicator of future inflation, contracted 4.5 per cent in May after shrinking 5.7 per cent the previous month, the central bank said.
M1 money supply, a narrower measure that excludes some savings and time deposits, contracted 19.1 per cent compared with a contraction of 12 per cent the previous month, the central bank said in a report on its website yesterday.
Inflation across the Gulf has slowed from records last summer as oil prices plummet from their high of more than $147 (Dh540) a barrel.
A stronger dollar also has made imports cheaper for Gulf countries whose currencies are pegged to the dollar and real estate prices have tumbled. The global credit crunch choked off liquidity to local banks making them more cautious on lending.
Total commercial bank deposits in Qatar contracted an annual 3.3 per cent in May compared with a contraction of 3.5 per cent in April, the central bank said.
Qatar's government said on May 28 that it would buy real estate investments worth as much as 15 billion riyals from local banks.
Central bank Governor Abdullah Bin Saud Al Thani said in May that Doha was prepared to extend a bailout of investment-bank funds to other industries after saying in March that it would buy $1.8 billion in investments from seven local banks.
The central bank's foreign assets rose 9.5 per cent in May after contracting 7.3 per cent the month earlier, according to the data.
Claims on the private sector rose an annual 27.3 per cent in May compared with 30.9 per cent in April.
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