DUBAI: Qatar’s central bank has tightened its curbs on how much banks can invest in stocks and bonds, according to a circular released by the central bank and seen by Reuters.
Banks’ total investment in equities and debt instruments must be limited to 25 percent of their capital and reserves, though debt instruments issued by the government and national banks are exempt from the limits.
Previously, under instructions to banks issued in November 2011, the limits were 30 percent each for equities and debt instruments.
Among other restrictions, the central bank set new limits for investment in individual companies and unlisted securities, and introduced a 15pc ceiling for total securities investment outside Qatar.
Real estate investment by Islamic banks will be limited to 10pc of capital and reserves; earlier, the limit was 30 pc.
The central bank did not give the reasons for its new rules, but Qatar is gearing up to spend tens of billions of dollars on major infrastructure projects, and it is seeking to develop its government debt market partly to help finance this.
The circular did not say over what time frame the new rules would be implemented and central bank officials could not be contacted to elaborate.
REUTERS
