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DUBAI, Nov 7 (Reuters) - The Qatar central bank’s international reserves and foreign currency liquidity dropped in September in a sign of capital outflows caused by sanctions imposed by other Arab states.
The reserves and liquidity, a measure of the central bank’s ability to support the riyal currency, fell to $35.6 billion in September -- their lowest level since at least 2012 -- from $39.0 billion in August, official data showed on Tuesday.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Doha on June 5, prompting banks and investors from those countries to withdraw billions of dollars from Qatar.
This has put the bank’s reserves under pressure. International reserves and foreign currency liquidity stood at $45.8 billion in May, before the diplomatic crisis erupted.
However, bankers and analysts think Qatar is in no danger of running out of reserves because it can draw on the resources of its vast sovereign wealth fund, which is believed to have over $100 billion of liquid foreign assets. Reserves rebounded in August, apparently because of an injection from the fund.
Starting with the August data, the central bank changed the format of its data; it stopped disclosing net international reserves and began using a different and larger indicator, international reserves plus foreign currency liquidity.
Manay analysts believe pressure on the reserves is likely to ease in coming months since the other Arab states have now pulled out most of their deposits, loans and portfolio investments in Qatar, leaving relatively little money left to withdraw. (Reporting by Andrew Torchia,; editing by Ralph Boulton and Angus MacSwan)