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DOHA / Reuters
Qatar’s central bank said that it raised its overnight lending rate by 25 basis points to 5.0 percent after the U.S. Federal Reserve tightened policy by a similar margin.
The central bank also increased its overnight deposit rate by 25 bps to 1.25 percent.
However, the central bank reduced banks’ reserve requirement — the amount of money they must hold back from lending as reserves – by 25 bps to 4.5 percent. The reserve requirement cut followed complaints by commercial banks about tight liquidity in the money market, which has driven short-term market rates up sharply in the past 18 months. The reserve requirement was last changed in April 2008.