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Middle EastJune 1 2018

In splendid isolation: how Qatar's banks are thriving amid a blockade

Blockaded by several influential Arab countries since June 2017, Qatari banks have had to cope with ratings downgrades and an outflow of deposits. However, as Kit Gillet reports, they are still posting impressive profits and seem unfazed by such geopolitical unrest.
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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.

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