QCB Directs Banks to Apply New Instructions on Dealing with Foreign Currencies

March 02, 2017

With effect from the first day of next April, banks operating in Qatar shall start applying the new instructions of Qatar Central Bank (QCB for dealing in foreign currencies and balancing their open positions for all foreign currencies. The instructions had been issued on 07/04/2016 giving one-year grace period for application. Starting from the above deadline banks should adjust their positions.  According to the instructions, the Maximum Limit of Total Open Positions (total surplus positions or total deficit positions, whichever is higher) is 30% of the Bank’s capital and reserves. For purposes of calculating the above-mentioned limits, the banks participations in the subsidiaries and associates shall be excluded from total assets and their hedging operations, if any, shall be also excluded. QCB confirmed that the aim of the new instructions is to mitigate the risk of open positions for foreign currencies. In case the ratio of the surplus/deficit of any currency exceeds 5% of the bank's capital and reserves, a detailed statement of this currency shall be attached to the report. As for the Gulf currencies, net positions for each currency shall be disclosed in a separate statement.