Analysts have said the move on Tuesday, which brought the main overnight deposit rate down to 1.0 percent from 1.5 percent and marked the first rate change since August, was probably also aimed at curbing capital inflows.

It followed the central bank’s decision in January to limit the amount of money banks could earn interest on with the central bank.

“Due to the current economic local and international circumstances, this reduction aims to stimulate banking market activities and boost domestic lending extended to the private sector,” the central bank said in an e-mailed response to Reuters questions.

It cut both the overnight lending facility and the repo rate to 5.0 percent, from a respective 5.5 percent and 5.55 percent previously.

The central bank also said the move was in line with its role in serving the developing economy as spending on infrastructure and real estate projects was expected to increase in the coming period.

Qatar, the world’s largest liquefied natural gas exporter, last changed its policy rates in August when it trimmed its deposit rate by 50 basis points but left other rates unchanged.

In January, the central bank capped liquidity volumes it was willing to absorb from banks, giving them an incentive to pour excess cash into a 50 billion riyal ($14 billion) government bond also on offer. Riyal forward dipped on Tuesday after news of the rate cut, implying bets on a stronger currency.

Qatar pegs its currency to the dollar. That limits the central bank’s flexibility to move far from the US benchmark rate as that could trigger larger capital flows and put the peg under pressure. The peg is set at 3.64 to the dollar.

Qatar’s economy is expected to surge 15.8 percent this year, one of the fastest rates in the world as it benefits from recent gas output expansion, a 19 percent rise in government spending and robust crude prices of over $108 per barrel.

The state is expected to spend heavily on infrastructure ahead of hosting the 2022 soccer World Cup.

Private sector credit rose by 7.9 percent year-on-year in February, a five-month high, but was still well below double-digit rates of 20-40 percent seen in the first half of 2009.