The Qatari riyal came under pressure on Tuesday as banks in Saudi Arabia and the UAE began to hold off on business deals with Qatari banks amid a deepening diplomatic rift in the region, Reuters reported.
Saudi Arabia's central bank advised banks in the kingdom not to trade with Qatari banks in Qatari riyals, sources told Reuters.
On the other hand, Egypt Independent reported that Egypt’s central bank did not order to halt Qatari riyal transactions.
The Qatari Riyal is pegged by the Qatari Central Bank at 3,64 to the dollar. This means that the central bank will use its foreign currency reserves to ensure the exchange rate does not fall below the 3,64 rate.
With an estimated $335 billion of assets in its sovereign wealth fund and its gas exports earning billions of dollars every month, Qatar seems to have enough financial power to protect its banks. But, for how long?
