LONDON: Numerous global banks and currency exchanges are refusing to deal in Qatari riyals amid the ongoing diplomatic spat in the Gulf, financial institutions told Arab News.
Qatar’s currency has been under pressure following the June 5 move by Saudi Arabia, the UAE, Egypt and Bahrain to cut diplomatic and transport ties with Doha, accusing it of backing terrorism.
Many exchange houses in the Gulf reportedly stopped accepting riyals early on in the crisis, and global institutions have followed.
The Post Office, one of the UK’s main operators of currency-exchange services, said it took the decision to “temporarily” stop trading in riyals on June 5.
This is because the banks it deals with had refused to deal with the currency. “Banks we utilize to dispose of excess Gulf currencies informed us at the outset that they were no longer buying (Qatari riyals),” a Post Office spokeswoman told Arab News:
Travelex, another currency exchange in the UK, also said it is not trading in riyals, although will still honor its “buy back guarantee” for this currency.
“I can confirm that we’re not buying Qatari riyals in the UK. This is not a global policy,” a spokeswoman for Travelex in the UK said.
Numerous other financial institutions overseas are also declining to accept riyals, causing problems for Qatari residents abroad, according to social media users.
Twitter user Hisham Zubair, writing in response to a question posed by Doha News, said that riyals were not being accepted at Bangkok airport or exchange houses in India.
But some other financial institutions and money-transfer services said that they were still operating in Qatar. “In compliance with local and international laws and regulations, Western Union services are available to consumers in Qatar,” a representative of the group told Arab News.
Most of the currency exchange houses in the UAE stopped accepting riyals in early June, according to local reports.
But one, UAE Exchange, said it is still accepting both buy and sell trades, according to a telephone customer service representative contacted this week.
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 US dollar this week, according to Reuters.
Standard & Poor’s on June 7 downgraded its long-term rating of Qatar by one notch, to “AA-“ from “AA”, and put the rating on watch, meaning there was a significant chance of a further downgrade.