Qatar’s sovereign wealth fund has repatriated $20 billion to ease the effects of sanctions imposed on the country in its dispute with a quartet of Arab countries led by Saudi Arabia.
Doha’s move is seen as a response to the severe consequences on its economy, despite its denials that it is in financial distress.
Qatari Finance Minister Ali Shareef al-Emadi told London’s Financial Times: “Qatar Investment Authority (QIA) deposits were being used to create a ‘buffer’ and provide liquidity in the banking system after the gas-rich state suffered capital outflows of more than $30 billion.”
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and economic ties with Qatar in early June after accusing Doha of supporting extremist groups at the expense of their security.
“We are not liquidating anything. What we have done is taken some of our liquidity from outside to inside,” Emadi told the Financial Times.
“This is through the Ministry of Finance and the QIA, which is very normal in this type of situation,” Emadi said, adding that the steps were pre-emptive and precautionary.
The QIA, which is estimated to have $300 billion in assets under management, reduced its stakes in Tiffany & Co, Credit Suisse and Russian energy firm Rosneft. Emadi said the changes were not related to the Gulf dispute but a part of the fund’s investment strategy.
The Qatar Central Bank said the ramifications on the country’s finances had been severe. The Doha government injected approximately $40 billion — 23% of its GDP — into its economy in the first two months of the crisis. The breakdown in relations resulted in the outflow of approximately $7.5 billion in foreign customer deposits and $15 billion in foreign interbank deposits and borrowings.