Foreign currency purchase from Qatar exchange houses, moderate sale in 2020: QCB

The buying and selling of foreign currency by Qatar’s exchange offices moderated further in 2020, the Central Bank of Qatar said and noted that the “drop in remittances” contributed to the moderation of sales and foreign currency purchases last year.
“Given the balance between buying and selling, the demand for foreign currency from exchange bureaus to banks is expected to remain low. This is reflected in the low level of brokerage contributions to banks, ”QCB said in its latest Financial Stability Review.
In Qatar, remittances through exchange offices in Qatar fell in 2020 under the double impact of the pandemic and falling oil prices combined with increased spending within the national economy.
As in the previous year, the decline was spread across all major regions. The share of funds to Asia continued to dominate and increased during the year.
Remittances to the top five countries also moderated but relatively slowly compared to other countries, resulting in a modest increase in their share.
Under the current circumstances and due to the tendency of customers to use online banking services through smartphone apps and websites, and given the noticeable increase in hacking and cyber fraud attempts, brokerage houses were urged to take the necessary security measures to protect the network and infrastructure of banking services systems.
“All have been informed that prior authorization from QCB is now required for the import or export of foreign currency as well as Qatari riyals,” QCB said.
The assets of foreign exchange houses had recorded a strong growth of 20.6% in 2019 but given the economic slowdown, their assets during the year 2020 fell by 13%, which is nevertheless still above its 2018 level.
The decrease in assets in 2020 is mainly due to the decrease in cash balances, bank receivables and other assets. Total assets at the end of 2020 stood at QR 1.9 billion, QCB noted.
On the liabilities side, contributions to currency changers and branches fell sharply, followed by other liabilities.
Shareholders’ equity improved during the year thanks to the increase in paid-up capital and legal reserves.
Cash at exchange offices includes cash, contributions from banks, and contributions from exchange offices and branches. Their liquid liabilities include contributions to banks and contributions to exchange bureaus and branches.
The liquid assets as well as the liquid liabilities of the brokerage houses moderated almost in parallel, resulting in stable net liquid assets. However, due to the moderation of aggregate assets, the share of net liquid assets in total assets saw a strong recovery during 2020.