As strongly-worded ultimatums are re-issued, and compliance deadlines pass, the diplomatic crisis in the Gulf grinds on with no obvious end in sight. And the real world actions that Saudi Arabia, the UAE, Egypt and Bahrain have so far taken against Qatar mean the financial impacts have now moved beyond the hypothetical.
The Qatari currency, the riyal, remains nominally pegged to the U.S. Dollar, but it has recently been trading at its weakest level against the greenback in almost three decades. A lack of liquidity in the spot market is partially responsible, and on a retail level that shortage is even playing out here on the British high street. A number of foreign currency suppliers in the U.K. have apparently stopped trading in Riyals, and the knock-on effect has been almost immediate. Barclays, Royal Bank of Scotland, the Post Office and Lloyds Banking Group have announced in the last few days that they are no longer exchanging the currency at their branches.