Right, so Qatar has decided “go fuck yourselves” will be the official response to Saudi Arabia with regard to the kingdom’s list of conditions for restoring diplomatic ties and lifting the economic blockade that’s caused episodic turmoil in Doha’s financial markets.
You can read the latest on the demands and the expiring deadline for meeting them here, but suffice to say Qatar isn’t backing down (as of this writing anyway) and is, to quote Foreign Minister Mohammed Al Thani “ready to face the consequences.”
Well, the “consequences” so far have included Doha relying more heavily on Tehran (a strange alliance from a sectarian perspective, but perhaps not so strange from a strategic point of view) and a loss of confidence in Qatari markets.
As noted earlier today, the QE Index fell 8.8% in June – that’s the worst monthly performance since January 2016:
But the real problem may be the riyal.
With at least six banks in the UK saying they have fully or partially stopped trading in riyals, there are very real concerns about the peg. So if you want to know how acute the crisis really is for Doha, just keep tabs on riyal forwards…