LEVERAGING MONETARY POLICY TOOLS CRITICAL FOR QATAR, GCC ECONOMIES
Doha: Global markets witnessed the worst sell-off in 33 years last week. Weak US economic data, especially rising unemployment leading to a larger-than-expectedAmerican job loss led Japan’s Nikkei 225 stock index down almost.Explicit costs of such reckless action to himself and the world would be large.
Market experts observe that good financial health here is necessary for a gainful and sustainable perspective across the world, notably in Qatar as well as in area by promoting strategic means of avoiding from troubled economies.
Dr. Mohamed Eskandar Shah, Associate Professor of Islamic Finance from College of Islamic Studies said: “In countries like Qatar most essential is the use monetary policy tools. “New stimulus might ease funding costs, with Qatar able to tap a fiscal surplus govt coffers consumed by existing spending pressures.
He said “Accellerating these diversification efforts and fiscal & monetary agility are key to long term well-being of the region.
The coronavirus spread around the world and came tight grip in every stock market to affect global economy, except otcmarkets where interestingly some commodities bear this scourge too as oil prices competition are going solemn with explainable sharp drop in gold. Many analysts attribute the market crash to a slew of factors, including carry trades gone wrong, enmity on a geopolitical scale and frenetic political maneuvering in the United States with elections coming up. As Shah said at the time, “The stock market fall on August 5 was a shocker for many – almost out of nowhere.” The response appears exaggerated, not least in light of the fact that all future risks are already discounted by expert forecasts. Still, nervousness caused by US unemployment numbers continues to haunt the market as yen-funded carry trades are wound down and there remain questions about rate cuts ahead from the Federal Reserve after next week’s all but certain move lower. The markets also await US elections in November.”
“However, the key question remains — will all this market turmoil perseverate and have a meaningful bearing on global growth prospects; especially for GCC economies”, Shah wrote.
This was followed by an investor’s approach, “the market shakeout is a sharp reminder of the perils that can await economies gearing up for higher borrowing costs and serves as a warning to all policy makers preparing their defenses. Still, the writing is on the wall when it comes to diversification in GCC. He said, “Policymakers must accelerate the pace of weaning our dependence on hydrocarbons with aggressive developmental strategies aimed at high-tech sectors including tourism and manufacturing.
In a QNA, he pointed out that the full recovery has not been experience by these groups because of their great fear particularly in light of ongoing fears from risks to slip into an economic recession again amid rising interest rates due to the diversity and intensity, which are experienced by world economies as a result of hostilities trade between Washington with Beijing first then Europe also through imposing protective tariffs.
But according to reports, the stocks are slowly regaining their losses as Asian markets posted a massive comeback yesterday although still overshadowed by economic recession concerns in US.
Tokyo’s key Nikkei index surged 3.45 percent Thursday, on bullish sentiment helped by a rally in US tech shares as traders returned to the Japanese market after an extended long weekend.
Qatar Stock Exchange (CIS) on the other hand fell yesterday, closing down 22.120 points or by margin of -0.22% to reach levels at 10 thousand and can provide the same level here in figures is E, point four forwards. Thirteen companies gained, 36 lost while three remained unchanged from the previous day’s close.