...Banks in Qatar have been successful in the past few years in raising funds from abroad, which attests to their attractiveness to foreign investors. However, S&P Global Ratings believes that the sharp increase in the external debt of Qatari banks raises their vulnerability to the risk of a shift in investor sentiment or change in global liquidity conditions. Some of the leading Qatari banks sought external liquidity when deposits of government and government-related entities (GREs) decreased when oil prices started to decline in the second half of 2014. The banks have managed to attract a significant amount of external funding, mostly denominated in U.S. dollars and mostly short-term debt of about six months, according to our understanding. On the other hand, Qatari banks have used a large portion of this funding to finance typically long-term local projects denominated in Qatari riyal (QAR), resulting in a significant open position in U.S dollars. Although we consider that external funding...
