Insufficient Information Summary
There is insufficient publicly available information regarding Qatar's compliance with the International Monetary Fund's (IMF) standard of Code of Good Practices on Transparency in Monetary Policy. Qatar is one of the six states that comprise the Gulf Cooperation Council (GCC), which is currently working toward the establishment of a regional currency and the formation of the Gulf Monetary Union (GMU). The target date for achieving the GMU was initially set for 2010, but with the decision by Oman to pull out of the plan and Saudi Arabia's refusal to join thus far, the target date for the formation of the GMU has been pushed out to 2013. Once the GMU is in place, monetary policy in member states will be set at the regional level. Qatari legislation is silent on a number of important aspects of the principles that comprise the monetary policy transparency standard. The responsibility for monetary policy falls to the Monetary Policy Committee (MPC) of the Qatar Central Bank (QCB). There is no legal requirement imposed on the QCB regarding the dissemination of monetary policy related information. Nonetheless, the QCB website does provide public access in relatively user-friendly form to information regarding the MPC's policy goals, decisions, and available tools.
General Overview
Qatar has not yet been the subject of a published International Monetary Fund (IMF) Report on the Observance of Standards and Codes monetary policy transparency module. Such information as is available on the topic must be gleaned from information published in the IMF's Article IV Consultations reports for the country and from the IMF's General Data Dissemination System (GDDS) website. Qatar has been a participant in the GDDS since 2005.
An undated paper written by Fahad Faisal al-Thani for the Bank for International Settlement provides a history of Qatar's monetary policy regime and how it has evolved over time. Prior to the early 1970s, Qatar was linked to the British currency, lacked a national currency and was dependent on foreign banks. In 1965, however, the Qatar National Bank was established as the first domestic bank, shortly after which the Qatar-Dubai riyal was adopted as the domestic currency. In the early 1970s the Qatar Monetary Agency (QMA) was created through Law No. 7, which conferred upon it central bank status. At the same time, the Qatari riyal became the domestic currency, replacing the Qatar-Dubai riyal. The QMA was replaced in 1993 with the Qatar Central Bank (QCB) following the issuance of Amiri Decree No. 15, which mandated it to formulate monetary policy as the sole monetary authority of the state. The legislation governing the QCB today comprises the Law Establishing the Qatar Central Bank and the Qatar Central Bank Law No. 33, 2006, which replaces earlier governing legislation. Within the QCB, monetary policy formulation is the responsibility of the Monetary Policy Committee, according to the QCB website. Chairing the MPC is the Governor, who works in concert with the Director of the Department of Economic Policies and the Director of the Department of Public Debt, Banking Affairs, and Issuance. As one of six member states of the Gulf Cooperation Council (GCC, which also includes Bahrain, UAE, Kuwait, Saudi Arabia, and Oman), Qatar has been working toward the establishment of a single currency and the formation of a regional monetary union. To this end, it participated in the creation of a technical committee with representatives of the central banks and finance ministries of GCC countries, and has enjoyed the assistance of the European Central Bank, exploring policy coordination across the region.
According to the IMF's GDDS website, the QCB's activities and operations are governed by the Decree Law No. 15 of 1993 Establishing Qatar Central Bank (QCB Law), as amended by the Decree Law No. 19 of 1997. Although not explicitly required to do so by law, the QCB provides public access to information regarding its monetary policy decisions and data in the pages of the Monthly Statistical Bulletin, Quarterly Statistical Bulletin, and Annual Report, as well as online, in both Arabic and English versions. As noted on the GDDS website, "formal QCB documents, in the form of administrative resolutions, QCB notices, resolutions, and executive instructions, further clarify the responsibilities for collecting, processing, and disseminating statistics and organize the collection and compilation of data." The QCB's structure is laid out in Administrative Resolution No. 3 on Issuing the Organizational Guide of the QCB, (January 2000), while the structure and functions of the Department of Economic Policies is elaborated in the January 2001 Amendment to the Guide and Organizational Structure of the Department.
The 2008 IMF Article IV Consultation report, published in 2009, noted that, at present, the QCB's monetary policy is intended "to ensure that inflation is reduced and that the growth of assets, credit, and deposits of the banking system is not choked off" (p. 16). The report observed that, in pursuit of the goal of creating a regional monetary union, Qatar is aware that more progress is required in a number of areas, including "the coordination of monetary, exchange rate, and reserves policy; the integration of clearing and settlement systems and common supervisory and regulatory standards; issues relating to the transition to a new currency; and the harmonization and compilation of regional economic statistics" (p. 21).
An August 2008 report by the IMF explains that the draft Monetary Union Agreement (MUA) under consideration by the Gulf Cooperation Council (GCC, made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE)) was provided by the European Central Bank. The MUA relies upon five convergence criteria, including such issues as public debt, reserves, interest rates, inflation, and fiscal balance. These criteria had nearly all been met by the end of 2007 by all GCC countries, although inflation convergence remained "at a level that is obviously too high from the standpoint of macroeconomic stability" (p. 10). In a 2009 IMF Working Paper by Abdullah al-Hassan, it was announced that Bahrain planned to join the other five GCC countries in a proposed GCC Monetary Union, which would entail the adoption of a "single and indivisible common monetary policy… based on GCC-wide economic and financial developments" (p. 3). A June 11, 2009 article in the Gulf Daily News (GDN) asserted that Qatar joined Kuwait, Bahrain, and Saudi Arabia in signing an accord to set up a precursor council in preparation for ultimately creating that common currency. However, the other two GCC states, the United Arab Emirates and Oman, remain aloof from the plan. The UAE apparently based its reservations with the plan on the choice of Riyadh, in Saudi Arabia, as the headquarters of the proposed union, rather than locating the headquarters within the UAE. There was no mention as to why Oman had pulled out of the plans for monetary union in 2007, after initially agreeing to participate. According to the GDN report, the original target date of 2010 for the establishment of the proposed monetary union is considered "unrealistic" due to the global economic downturn, and suggests that a new target date is likely to be set for 2013.
The Principles
IIClarity of roles, responsibilities and objectives of central banks.
The legislation governing the QCB today comprises the Law Establishing the Qatar Central Bank and the Qatar Central Bank Law No. 33, 2006, which replaces earlier governing legislation. Within the QCB, monetary policy formulation is the responsibility of the Monetary Policy Committee, according to the QCB website. Chairing the MPC is the Governor, who works in concert with the Director of the Department of Economic Policies and the Director of the Department of Public Debt, Banking Affairs, and Issuance. According to the IMF's GDDS website, the QCB's activities and operations are governed by the Decree Law No. 15 of 1993 Establishing Qatar Central Bank (QCB Law), as amended by the Decree Law No. 19 of 1997. Although not explicitly required to do so by law, the QCB provides public access to information regarding its monetary policy decisions and data in the pages of the Monthly Statistical Bulletin, Quarterly Statistical Bulletin, and Annual Report, as well as online, in both Arabic and English versions. As noted on the GDDS website, "formal QCB documents, in the form of administrative resolutions, QCB notices, resolutions, and executive instructions, further clarify the responsibilities for collecting, processing, and disseminating statistics and organize the collection and compilation of data." The QCB's structure is laid out in Administrative Resolution No. 3 on Issuing the Organizational Guide of the QCB, (January 2000), while the structure and functions of the Department of Economic Policies is elaborated in the January 2001 Amendment to the Guide and Organizational Structure of the Department. However, there is no publicly available information directly addressing how well the laws and their resultant organizational forms in Qatar comply with this principle.
IIOpen process for formulating and reporting monetary policy decisions.
There is insufficient publicly available information that directly addresses Qatar's compliance with this principle. However, an undated paper written by Fahad Faisal al-Thani for the Bank for International Settlement notes that, in the early 1970s, the Qatar Monetary Agency (QMA) was created through Law No. 7, which conferred upon it central bank status. The QMA was replaced in 1993 with the Qatar Central Bank (QCB) following the issuance of Amiri Decree No. 15, which mandated it to formulate monetary policy as the sole monetary authority of the state. The legislation governing the QCB today comprises the Law Establishing the Qatar Central Bank and the Qatar Central Bank Law No. 33, 2006, which replaces earlier governing legislation. Within the QCB, monetary policy formulation is the responsibility of the Monetary Policy Committee, according to the QCB website. Chairing the MPC is the Governor, who works in concert with the Director of the Department of Economic Policies and the Director of the Department of Public Debt, Banking Affairs, and Issuance. As one of six member states of the Gulf Cooperation Council (GCC, which also includes Bahrain, UAE, Kuwait, Saudi Arabia, and Oman), Qatar has been working toward the establishment of a single currency and the formation of a regional monetary union. To this end, it participated in the creation of a technical committee with representatives of the central banks and finance ministries of GCC countries, and has enjoyed the assistance of the European Central Bank, exploring policy coordination across the region.
IIPublic availability of information on monetary policy.
There is insufficient publicly available information that directly addresses Qatar's compliance with this principle. However, the IMF's GDDS website reports that, although not explicitly required to do so by law, the QCB provides public access to information regarding its monetary policy decisions and data in the pages of the Monthly Statistical Bulletin, Quarterly Statistical Bulletin, and Annual Report, as well as online, in both Arabic and English versions. As noted on the GDDS website, "formal QCB documents, in the form of administrative resolutions, QCB notices, resolutions, and executive instructions, further clarify the responsibilities for collecting, processing, and disseminating statistics and organize the collection and compilation of data." The QCB website provides relatively easy access to a wide range of monetary policy-related information, including policy goals and tools, the text of related legislation, and other informational and data-oriented documents.
IIAccountability and assurances of integrity by the central bank.
There is insufficient publicly available information that directly addresses Qatar's compliance with this principle. The one component of the QCB's website that would be likely to contain information regarding accountability and assurances of integrity – a web page devoted to issues of governance, was as yet inoperative as of the end of July 2009, but the existence of such a web page title implies that such information may be forthcoming at some future date. Qatar is not a subscriber to the IMF's Special Data Dissemination Standard, but has participated in the less rigorous GDDS since December 30, 2005.
