How does the Qatar Central Bank (QCB) maintain monetary stability and anchor domestic price expectations within its monetary policy framework?
Answer and explanation
Correct answer: A. By maintaining a fixed peg of the Qatari Riyal to the US Dollar at 3.64
- Step 1: Since July 2001, the Qatari Riyal (QAR) has been officially pegged to the US Dollar at an exchange rate of USD 1 = QAR 3.64.
- Step 2: Because hydrocarbons are priced globally in USD, the fixed peg eliminates exchange rate volatility for export revenues.
- Step 3: QCB coordinates domestic interest rates with the US Federal Reserve to prevent destabilizing capital flight.
Answer
By maintaining a fixed peg of the Qatari Riyal to the US Dollar at 3.64.
Why not the others: The Riyal has been held at a fixed rate to the US dollar for decades; it is not tied to a basket, the SDR or another Gulf currency.
Practise more Constitutional Framework, Shura Council and National Governance.
Free questions with an explanation for every one, and full timed General Knowledge (Qatar) mock tests.
More Constitutional Framework, Shura Council and National Governance questions
- According to Article 1 of the Permanent Constitution of Qatar, what is the defined political character and religion of the State of Qatar?
- Under the Permanent Constitution of Qatar, how is the rule of the state inherited?
- Under the original text of Qatar's 2003 Permanent Constitution (Article 77), what was the composition of the 45-seat Shura Council?
- What legislative and supervisory powers are vested in the Shura Council of Qatar under the constitution?
- Who is the Head of State of Qatar, holding supreme executive power, command of the armed forces, and representing the state internationally?
- What is the supreme executive organ charged with implementing state policies, supervising ministries, and administering government agencies…