Qatar News: Fitch Sees Banks Benefiting From Saudi Arabia Fund Inflows - Bloomberg
Saudi Arabian clients are expected to start shifting some of their funds back to Qatar after four Arab states agreed to restore ties with the gas-rich nation after a three-year regional split, according to Fitch Ratings.
“This will provide Qatari banks with an additional pool of liquidity, which will diversify their funding base, reduce their reliance on price-sensitive government-related entity and corporate deposits, and cut their funding costs,” the rating agency said.
Saudi Arabia, Bahrain, the United Arab Emirates and Egypt on Tuesday agreed to restore ties with Qatar after a sustained U.S. push for the countries to unite against Iran. The wider economic and financial implications of resolving the dispute will be felt particularly in Qatar, which had increasingly turned to Iran and Turkey for support.
The Saudi-led bloc’s standoff with Qatar led to the withdrawal of about $30 billion of non-resident deposits from the country’s banks in June-October 2017, mainly by Saudi depositors and some from the UAE, according to Fitch. It tightened foreign-currency liquidity, and Qatari authorities stepped in with $40 billion of sovereign liquidity injections, Fitch said.
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