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LONDON (Reuters) - Lloyds Banking Group (LLOY.L) said on Friday that it has stopped trading Qatari riyals and that the currency is no longer available for sale or buy-back at its high-street banks.
A spokeswoman for the bank said a "third-party supplier" that carries out its foreign exchange service had ceased trading in the currency from June 21.
"This currency is no longer available for sale or buy-back across our high street banks including Lloyds Bank, Bank of Scotland and Halifax," the spokeswoman said.
Qatar's central bank said on Friday it will guarantee all exchange transactions for customers inside and outside Qatar without delay, adding that all banks and foreign exchange companies are committed to trading the riyal as usual
The statement came after media reports said some exchange companies have stopped buying the Qatari riyal, which the central bank called "baseless".
Exchange company Travelex said on Thursday it has resumed purchasing the Qatari riyal globally after a brief suspension "due to business challenges".
Economic sanctions and poor liquidity have created chaos in the foreign exchange market for Qatari riyals, with the currency trading far below its peg to the U.S. dollar.
The riyal QAR= has been increasingly volatile in the spot market since Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic ties with Qatar on June 5, accusing it of backing terrorism.
Reporting By Andrew MacAskill and; Sylvia Westall; editing by John O'Donnell