Under mounting pressure, Qatar’s central bank relaxed banking and foreign exchange regulations for expatriates living in the Arabian Gulf state, after a quartet of countries led by Saudi Arabia severed political and economic ties on June 5, crimping the state’s growth and putting a strain on its banking regime.
The central bank ordered conventional and Islamic banks in the sheikhdom to allow residents with expiring visas to conduct all their banking operations throughout the official three-month period for renewing their residency after the visa expiry, it said in a statement on its website.
This order also applies to foreign exchange companies that are in possession of central bank licences and conduct activities including foreign exchange, and transfer and receipt of money.
The central bank said this procedure is aimed at facilitating the transactions of residents in Qatar and to guarantee the smooth functioning of their financial affairs.
Qatar has been undertaking a series of measures to shore up its economy and convince expatriates to remain in the beleaguered country, which is suffering from the Arab boycott that has deprived it of its only land border crossing, key air routes and access to the Gulf’s main ports.
The trade and travel ties were cut by the UAE, Saudi Arabia, Bahrain and Egypt over its support for terrorist groups and attempts to undermine their regional policies and domestic affairs.
The quartet also cut all diplomatic relations.
Qatar announced in August visa-free entry for the citizens of 80 countries and became the first GCC country to create a permanent resident status for expatriate workers who have “given service to Qatar” or possess “skills that can benefit the country.”
The country’s economy is struggling to weather the crisis, which has led credit rating agencies to downgrade its sovereign and bank ratings, dented economic growth, pushed the stock market to shed more than 11 per cent of its value and pressured its sovereign wealth fund to transfer money home.
Moody’s estimates that Qatar burned through US$38.5 billion, or 23 per cent of its GDP, to prop up its economy in the first two months of the sanctions.
Ali Shareef Al Emadi, the country's finance minister, told the Financial Times earlier this month that the Qatar Investment Authority, the country's sovereign wealth fund, had brought back more than $20bn into the country since the stand-off with its neighbours began in June, but denied that Qatar had to resorted to asset sales in order to raise the necessary funding.
Qatar’s non-oil economy will slow this year to 4.6 per cent from 5.6 per cent last year, the IMF has forecast, as a result of the country’s continued isolation.