DUBAI (Reuters) – Deposits by foreigners in Qatari banks rose in December for the first time since other Arab countries imposed an embargo on Doha last June, data from Qatar’s central bank showed on Tuesday.
Banks and investors from Saudi Arabia, the United Arab Emirates, Bahrain and Egypt began pulling deposits and other funds out of Qatar in June, when those four nations cut diplomatic and trade ties with Doha.
But in December, deposits in Qatari banks by customers located abroad rose by 2.2 billion riyals ($606 million) from the previous month to 137.1 billion riyals, the data showed. They stood at 184.6 billion riyals in May, before the embargo.
Bankers say the vast majority of the four countries’ deposits in Qatar have now been pulled out, leaving little money left to withdraw. Meanwhile, the Qatari economy’s stability since the embargo was imposed has helped banks attract money from other foreign depositors.
To protect the banks from deposit outflows, Qatar’s government has been pumping some of its own money into the banks. The Qatari public sector boosted its deposits in local banks by 7.1 billion riyals in December to 315.4 billion riyals.
Meanwhile, Qatari banks owed banks outside the country 177.3 billion riyals in December, up from 176.7 billion riyals in November.
Qatari banks’ borrowing from foreign banks fell sharply in the initial months of the embargo as institutions from the four Arab countries stopped extending loans. But borrowing has started to edge up again as Qatari banks find other sources of loans in Asia and Europe.
(Reporting by Andrew Torchia; Editing by Matthew Mpoke Bigg)