In June 2017, Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut diplomatic ties with Qatar, accusing the country of fostering terrorism, something it strongly denies. The accompanying economic blockade caused the rapid outflow of deposits held in Qatari banks from entities in those countries, threatening the stability of the country’s banking sector.
In August 2017, Moody's cut its outlook for Qatar’s banking system from ‘stable’ to ‘negative’ for the first time since 2010 in reaction to the blockade, citing concerns over the potential outflow of foreign deposits and banks’ ability to access external funding. Meanwhile both Standard & Poor's and Fitch downgraded Qatar’s sovereign credit rating.