Yesterday Saudi Arabia, the United Arab Emirates, and Egypt led a handful of other countries including Bahrain, Yemen in severing diplomatic relations with Qatar – and these have now extended to some Qatar Bank sanctions.
- The three Gulf states gave Qatari visitors and residents two weeks to leave their countries.
- Saudi also closed the border and halted air and sea traffic with Qatar, urging “all brotherly countries and companies to do the same”
- Bahrain’s withdrew its diplomatic mission from the Qatari capital, Doha, within 48 hours
- The UAE ordered Qatari citizens to leave the country within 14 days and banned its citizens from traveling to Qatar.
- Egypt also announced the closure of its airspace and seaports for all Qatari transportation “to protect its national security”.
- UAE-based carriers Emirates, Etihad Airways, and FlyDubai said they would suspend flights to and from Qatar beginning Tuesday morning.
During my recent trip to the Middle East I stated that there can no longer be funding of Radical Ideology. Leaders pointed to Qatar – look!
— Donald J. Trump (@realDonaldTrump) June 6, 2017
Qatar Airways which flies to over 150 destinations was barred from flying over UAE and Saudi Arabia. They have complied, which now leads to some interesting flight radar maps.
IMAGE: Qatar Airways today pic.twitter.com/BXFndeFyZW
— The Spectator Index (@spectatorindex) June 6, 2017
Continuing the onslaught which was apparently green-lit by US President Trump, financial sanctions were now announced today targeting Qatar banks and finance including:
- Banks in Saudi Arabia, UAE & Bahrain HAVE suspended transactions to banks in Qatar, citing instructions by central banks.
- Saudi Central Bank told banks not to trade in #Qatari Riyals in addition to foreign exchanges
- U.A.E. banks not providing leverage on Qatar bonds
- Qatari riyal under pressure as Saudi, UAE banks delayed Qatar deals.
- UAE and Bahraini central banks had asked banks they supervise to report their exposure to Qatari banks
- Some Sri Lankan banks stopped buying Qatari riyals, saying counterpart banks in Singapore had advised them not to accept the currency.
- Commercial banks say that they stopped accepting Qatar Riyal as they have no way of repatriating and clearing them
Older pre-sanction report
- Qatari banks have been borrowing abroad to fund their activities. Their foreign liabilities ballooned to 451 billion riyals ($124 billion) in March from 310 billion riyals at the end of 2015, central bank data shows.
- So any extended disruption to their ties with foreign banks could be awkward, though the government of the world’s biggest exporter has massive financial reserves which it could use to support them. Banks from the United Arab Emirates, Europe and elsewhere have been lending to Qatari institutions.
- Because of its financial reserves and as long as it can continue exporting liquefied natural gas, Qatar looks likely to avoid any crippling economic crisis. But credit rating agency Moody’s Investors Service said on Monday that if trade and capital flows were disrupted, the diplomatic dispute could eventually hurt the outlook for Qatar’s debt.