Thursday 10 November 2011

Analysis - Gulf c.banks may store trouble with loose policies | Reuters

In April this year, with the economy growing at an annual clip of at least 15 percent, Qatar's central bank cut key interest rates by at least half a percentage point. In August, as domestic credit expanded at a nearly 20 percent rate, it cut them again.

Across the six oil-rich economies of the Gulf, central banks are running loose monetary policies that contrast sharply with their strong economic growth.

Saudi Arabia is holding its key interest rate at 2 percent, after cutting it to that level during a near-recession in 2009, even though gross domestic product growth has rebounded to a projected 6.2 percent this year, according to a Reuters poll of analysts.

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