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Qatar deposits billions into local banks to prevent cash shortage

Image of Qatar's central bank in Doha, Qatar [TravelingOtter/Wikipedia]
Qatar's central bank in Doha, Qatar [TravelingOtter/Wikipedia]

Qatar's national wealth fund, which is the region's largest lender, has deposited billions of dollars into local banks.

The Qatar Investment Authority (QIA) made the deposit following the withdrawal of funds by banks from neighbouring Arab countries that have imposed a blockade on the gas-rich Gulf nation.

Local Qatari banks were shored up by the Qatari sovereign wealth fund as the standoff between the Gulf countries begin to effect the amount of liquid assets available to residents.

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QIA was forced to deposit billions of dollars of cash, reported Gulf News, as lenders of some banks in Saudi Arabia, the United Arab Emirates and Bahrain started withdrawing funds from the country. The banks, according to the source, did not want to be identified and the exact amount remains unclear.

The decision by QIA to step in follows its isolation by a coalition of Arab countries headed by Saudi Arabia. The Gulf kingdom and its regional allies cut diplomatic relations with Qatar while imposing a blockade. Doha was forced to take a number of emergency measures, including importing shipments of food and seeking out alternative flight routes. Replenishing falling cash reserves is another indication that the siege is having a detrimental effect.

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