Introduction
Since its inception in 1993, Qatar Central Bank (QCB) inherited the Qatar Monetary Agency's monetary framework of targeting the exchange rate. The formal framework for the exchange rate policy is a fixed parity between the Qatari riyal (QR) and the United States dollar (USD) at QR 3.64 per USD. Hence, the de facto QCB's monetary policy objective is to keep the QR stable against the USD. Consequently, QCB's monetary policy is drawn and implemented to manage the short-term interbank rates with a view to sustain the fixed parity between the QR and the USD. The current QCB interest rates framework focuses on the average overnight interbank rate (AOIR) as the operating target. The aim is to align the AOIR within the QCBDR through liquidity management operations.
Monetary Policy Committee
The primary responsibility of Monetary Policy Committee (MPC) is the formulation and implementation of QCB's monetary policy. The Governor chairs the MPC. Assistant Governor of the Financial Stability Sector is the Deputy Chairman and the other members are Assistant Governors of Corporate Services, Financial Settlements and Payment System, Supervision, Reserve Management. The Directors of the Financial Stability and Surveillance and Monetary Policy as well as the Advisors to the Governor and expert at the Reserve Management are also members of the MPC committee. The Monetary Policy Department at the Financial Stability Sector acts as the Secretariat of the MPC. The MPC meets every six weeks and additional meetings are held, if required. Monetary Policy Division at the Monetary Policy Department continuously monitors the QR interest rates in the context of developments in the international interest rates, in particular, the US Federal Funds Rate, and reports to the MPC. Decisions taken by the MPC are announced to commercial banks operating in Qatar and to bank public via QCB website and social media.
