Qatar Central Bank (QCB) announced yesterday that it has raised the Repo Rate (QCB Repo Rate) by 25 basis points to 1.25 percent, starting from Thursday.
QCB said in a statement that the decision of raising the repo rate was based on the “evolving domestic and international macroeconomic developments.”
The repo rate, which is also known as the Repo, is the interest rate for one night or a very short period of time for the process of buying and selling assets, such as government bonds from the central bank, where dealers purchase government bonds for a certain period and then sell them to investors for either a short period or one night, after which they purchase them on the following day.
QCB also decided to maintain the QCB deposit rate (QCBDR) at its current level of 1 percent and maintain the QCB lending rate (QCBLR) at its current level by 2.50 percent.
It is noteworthy that the US Federal Reserve System (the US central bank) raised the federal funds interest rates by a quarter of a percentage point to reach 0.5 percent, which is the first time it increased since 2018.
The US Federal Reverse attributed its decision to raise the interest rate to the continuous increase in inflation rates, which was further fueled by the current war in Ukraine, and reached fuel prices to record levels.
According to economic reports, the improvement in the US employment rates in recent months also prompted the Federal’s current interventions to raise interest rates.
The QCB said it has reduced the repurchase agreement (repo) at a zero percent interest rate to QR25bn as part of the continued implementation of its strategy for the safe and gradual exit of exceptional support packages.
In a statement yesterday, QCB said that the instructions issued regarding the window would be extended for three months, starting from April 1, provided that the economic situation is evaluated every three months, and the window will be suspended on December 31, 2022, according to economic developments.
The QCB measure comes as a result of the continued gradual recovery of local economic activity from the negative effects of the outbreak of the COVID-19 pandemic.
