Qatar introduced its own currency on a currency board arrangement in 1973, and by 1979 was beginning to operate some limited monetary policy as well. By 1993 the arrangement had become exchange rate targeting, initially loose on the SDR and then by 2001 via a process of financial liberalisation full targeting on the USD, in the context of plans for GCC monetary union.
| Years | Targets and attainment | Classification |
| 1974-78 | new Qatari Monetary Agency and new Qatari riyal fixed to USD from 1973, replacing Qatar-Dubai Currency Board and Qatar-Dubai riyal and maintaining similar backing rule, but QMA takes time to recruit and begin operations (while Qatar National Bank is government’s fiscal agent); 1975 de jure peg switched to SDR and spreads narrowed; 1976 official margins vs SDR widened, de facto but specified peg to USD with much narrower spreads; 1978 Qatari riyal fixed de jure to USD, then two small revaluations during 1978 in line with Bahrain and UAE | pure currency board PCB |
| 1979-92 | 1979 and first half 1980 a series of small (unilateral) revaluations vs USD, aimed to deter capital outflows, but no changes after June 1980: USD peg maintained even when currency goes outside formal wide margins vs SDR; very narrow spreads maintained; QMA now more active, but mainly focused on bank supervision; monetary growth heavily affected by government operations, in context of highly open economy, but fiscal policy generally prudent; from 1992 interest rates on bank loans and deposits managed more flexibly in relation to international rates | augmented currency board ACB |
| 1993-2000 | 1993 QMA becomes central bank (though it does not handle government accounts); it remains partly currency board but reserve cover is over 100% so some more active monetary policy is possible; forex market now has some autonomy; bank lending rates fully liberalised 1995 but ceilings on some deposit rates remain until 2000 | loose exchange rate targeting LERT |
| 2001-23 | peg to USD formalised 2001 in context of GCC monetary union planned for 2010 (later postponed); Qatar Monetary Rate payable on bank deposits at central bank introduced 2002, later becomes one part of corridor with repo rate as other part, adjusted in line with US rates; more active liquidity management from 2007, including issue of Treasury bills from 2011 and later Treasury bonds and sukuk; slow but significant improvements to statistical database; strong response to Covid-19 makes for low GDP impact; interest rate corridor narrowed 2017-18 and again in 2022; 2022 global oil price rise (Ukraine war); | full exchange rate targeting FERT |
Selected IMF references: Currency Arrangements and Banking Legislation in the Arabian Peninsula, 1974; RED 1974 pp23-5; SR 1975 pp6-7; RED 1976 p27; RED 1977 p36; SR 1978 p3; RED 1978 p24; RED 1980 pp20, 24, 31; RED 1982 p32; RED 1983 pp33-5; RED 1986 p25; SR 1989 pp2-3; SR 1992 p12; RED 1994 pp25, 29-30; SR 1994 pp10-11; RED 1996 pp30-1; REDSI 2000 pp45-7, 59, 62-3, 71; SR 2002 pp13-15; SISA 2004 pp10-11, 54-5; SR 2004 pp12-13; SR 2007 p17; SI Dec 2012 pp22-3, 25-7; SR 2014 p13; SI 2017 pp20-3;SR 2019 p7; SR 2022 pp4-5, 16-17; SR 2023 pp18, 27.
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Monetary Policy Frameworks 