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No respite for Qatari assets after S&P downgrade

Thursday, June 08, 2017 - 01:44

Sources tell Reuters that Qatar's central bank is asking for frequent updates on forex and deposit movements amid signs investment funds are pulling money out because of its diplomatic rift with other Gulf states. As Sara Hemrajani reports, the Qatari riyal has also fallen to an 11-year low, while S&P has downgraded its debt.

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Qatari assets feeling the strain of the diplomatic rift. Its stocks now heading for their biggest weekly loss since March 2011. And the riyal has sunk to an 11-year low against the dollar. Adding to the pressure -- a rating downgrade by S&P Global with a negative outlook. Sources tell Reuters that the central bank in Doha is keeping a closer eye on movements. It's said to have asked some commercial lenders for daily updates on forex trading and money transfers. That's as the UAE warns it won't rule out further sanctions. SOUNDBITE: Anwar Gargash, UAE Minister of State for Foreign Affairs, saying (English): "Of course if we have to, these are all entanglements that we have to deal with as the crisis develops and create solutions to them and this will be a very, very sad course that we need to take. But I'm hoping that cooler heads will prevail in Qatar." Even though Qatar is a major gas producer, the crisis is weighing on oil markets as well. Analysts say this row could deepen divisions among OPEC's Middle East members. SOUNDBITE: Vicky Pryce, Chief Economic Adviser, CEBR, saying (English): "You would have thought that wouldn't have had an impact on the oil price and yet it is really the sort of politics and whether, in fact, we might see the various countries signing up, who have signed up to an agreement to restrain production, decide to do their own thing because that unity has sort of gone, or at least it seems to be under some sort of threat." Qatar remains one of the wealthiest countries per capita in the world, with an estimated $335 billion of assets in its sovereign wealth fund.

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No respite for Qatari assets after S&P downgrade

Thursday, June 08, 2017 - 01:44