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Qatar freezes new business for First Abu Dhabi Bank amid currency probe

March 17, 2019 at 2:31 pm

Qatar’s central bank in Doha, Qatar [TravelingOtter/Wikipedia]

Qatar will no longer permit First Abu Dhabi Bank, the largest bank in the United Arab Emirates (UAE), to provide services for new customers in Doha, its regulator said, amid a probe over alleged currency manipulation after the Gulf rift, reports Reuters.

Qatar’s central bank has been investigating whether rival countries attempted to devalue its currency, securities and derivatives markets just after a Saudi-led bloc launched a diplomatic and trade boycott against it in mid-2017.

Saudi Arabia, the UAE, Bahrain and Egypt accuse Qatar of supporting terrorism, a charge Doha denies.

Qatar keeps its riyal pegged at a fixed rate to the US dollar, but saw it trade several percent weaker than its usual rate of 3.64 per dollar in offshore markets just after the Gulf dispute began.

The Qatar Financial Center (QFC) said that FAB “failed to comply with an order of the QFC Civil and Commercial Court to produce an affidavit demonstrating its preservation of documents relevant to an ongoing regulatory investigation into potential manipulation of the Qatari Riyal”.

Timeline: Arab rift with Qatar

As a result FAB was now barred from “carrying on, for any new customers, any regulated activities, including deposit taking, providing credit facilities, arranging deals in investments, arranging credit facilities and advising on investments”, a QFC statement said.

An FAB spokeswoamn said the bank had no immediate comment on the matter.

Last March, Qatar asked US regulators to investigate the US unit of FAB, accusing it of “bogus” foreign exchange deals designed to harm Qatar’s economy.

FAB denied the charge.

QFC said the decision will not affect FAB’s ongoing business with existing customers in Qatar or “have any negative impact on those relationships”.

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