Qatar exchange houses’ foreign currency buying and selling to moderate in 2020: QCB

The buying and selling of foreign currencies by Qatar’s exchange offices moderated further in 2020, the Central Bank of Qatar said and noted that “lower remittances” had contributed to the moderation in sales and foreign currency purchases last year.
“Given the balance between sales and purchases, demand for foreign currency from exchange offices to banks is expected to remain weak. This is reflected in the low level of dues from exchange houses to banks,” QCB said in its latest Financial Stability Review.
In Qatar, outgoing remittances via exchange houses in Qatar fell in 2020 under the dual 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 destined for Asia continued to dominate and increased during the year.
Remittances to the top five countries also slowed, but relatively slowly compared to other countries, leading to a modest increase in their share.
In the current circumstances and due to the shift of customers to using online banking services via smartphone apps and websites, and given the noticeable increase in hacking and cyber fraud attempts, banking houses exchange were asked to take the necessary security measures to protect the network and infrastructure of the banking services systems.
“All have been informed that prior authorization from QCB is now required for the import or export of foreign currencies as well as Qatari riyals,” QCB said.
The assets of the exchange houses had registered a strong growth of 20.6% in 2019 but considering the economic slowdown, their assets during the year 2020 fell by 13% which, nevertheless, was still above its 2018 level.
The decline in assets in 2020 is mainly due to the decline 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, debts to exchange offices and branches fell sharply, followed by other liabilities.
Shareholders’ equity improved during the year thanks to the increase in paid-in capital and legal reserves.
Cash held by money changers includes cash, bank dues, and money changer and branch dues. Their liquid liabilities include debts to banks and debts to exchange offices and branches.
Liquid assets as well as liquid liabilities of exchange houses moderated almost in tandem, resulting in stable net liquid assets. However, due to moderation in aggregate assets, the share of net liquid assets in total assets recorded a strong recovery in 2020.