Qatar Central Bank Starts Probe Into Possible Riyal ManipulationBy and
Says manipulation is an attempt to hurt Qatar’s economy
Regulator hires Paul, Weiss, Rifkind, Wharton & Garrion
Qatar’s banking regulator started a legal investigation into the possible manipulation of its currency, securities and derivatives markets.
The central bank hired law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP to lead the probe, according to a statement posted its website. A number of financial institutions and individuals have been asked to preserve documents in advance of legal proceedings, it said.
"We know blockading countries and their agents are attempting to manipulate and undermine our currency, securities and derivatives, as part of a coordinated strategy to damage Qatar’s economy,” Governor Sheikh Abdullah Bin Saoud Al-Thani said in the statement. “We will not stand by while our country is attacked in this manner.”
The gap between the onshore and offshore riyal rates widened after Saudi Arabia and several other Arab nations accused Qatar of funding terror groups and cut political and commercial ties in early June. Qatar denies the charge.
The embargo prompted Qatari banks to provide cash for domestic business, but not for trades deemed speculative, forcing investors to turn to the offshore market, people familiar with the matter said in July.
The central bank last month pledged to provide dollars to both local and foreign investors at the official exchange rate after index provider MSCI Inc. considered using the offshore rate to value the country’s stocks. MSCI later decided to stick with the onshore rate.