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[DOHA] Qatar issued 15 billion riyals (S$5.66 billion) of bonds on Tuesday as the country takes advantage of low borrowing costs to replenish funds eroded by the decline in oil prices.
The sale, intended to boost the local capital market, was four times oversubscribed, central bank Governor Abdullah Bin Saoud Al Thani told reporters in Doha, without commenting on the bond's duration or pricing.
Qatar follows Saudi Arabia in raising money from local banks as the slump in oil prices buffets the finances of the Middle East's largest oil and gas exporters. Saudi Arabia said it tapped local markets in June and August and has raised at least 35 billion riyals from local bond markets this year, the first time it has issued securities with a maturity of over 12 months since 2007. Qatar needs an oil price of US$59.1 dollars a barrel to balance its budget, according to the IMF, and on Saturday said its trade surplus fell 56 per cent in July. Crude dropped below US$45 a barrel on Wednesday.
"The policy of the central bank is to manage liquidity," Mr Al Thani said. "Interest rates are low in Qatar now so we decided it was the right time to issue these bonds and sukuk." Saudi Arabia, the Arab world's largest economy, is expected to post a budget deficit of almost 20 per cent of gross domestic product this year, according to the International Monetary Fund.