Mubasher: Banks operating in Qatar have turned a corner after going beyond the negative impact of the blockade, Capital Economics said in a report on Wednesday.
Tight external financing conditions and the need to deleverage mean that the GCC nation's credit growth will provide less impulse to the economy than it has done over the past decade, the report showed.
Qatari banks suffered after the diplomatic crisis which brewed in June 2017, the report entitled “Qatar: banking strains ease, but credit to stay weak” highlighted, that propelled the economic research consultancy to urge investors to keep a close eye on developments in the banking sector.
The crisis drove the banks to raise interest rate by 45 base points (bp), in addition to borrowing from the Qatari central bank, the London-based research firm said.
“Spreads between Qatari and US interbank rates have actually narrowed as the worst fears for Qatar’s economy have faded. Foreign liabilities have started to rise again,” the report founded.
The report affirmed that there is little sign that Arab countries may reach a resolution concerning the dispute, especially after the dismissal of US Secretary of State Rex Tillerson – who had taken a neutral stance in the crisis.