Dubai: Banks and foreign exchange companies are refusing to take Qatari riyals, various news websites have reported.
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The decision that has caught many people off guard comes after rating agencies lowered Qatar’s credit rating and put it on “negative watch” amid an ongoing Gulf crisis, according to the websites.
Several Qatar residents travelling in Europe said they were not being able to exchange Qatari currency in the countries they were visiting.
One resident who is holidaying in the US this month was quoted as saying by one of the news websites, that he has been unable to exchange any of his Qatari riyals. “I am in Los Angeles and tried to exchange Qatari riyals at multiple banks, including US Bank, Bank of America and Chase, and they informed me that a directive was sent out to all US banks not to accept Qatari riyals at all,” the resident said.
Another reader reported that he was not able to exchange Qatari riyals in the Philippines, even though he tried at numerous banks and exchange bureaus.
“All the banks and money changers here in the Philippines are telling me that Qatari money has no rate,” she said.
Several people in other countries have had similar experiences:
“Yes!!! I’m in Pakistan and the money exchangers are giving me trouble. Will be back in Doha soon and will transfer money home from there,” one resident, Athar Kamal, said.
The banks (I tried at StandardCharted) are changing Qatari riyals but at a much lower rate than the market.”
The international exchange firm Travelex and the Halifax Bank of Scotland (HBOS) confirmed to one of the news websites that they were not buying Qatari riyals from the customers.
A staff member at the HBOS said that the bank has stopped buying Qatari riyals “as there is no market for selling them.”
According to recent news reports, customers are experiencing widespread problems exchanging Qatari riyals in India, Sri Lanka and Pakistan.
Mohammad Sadiq said that Sri Lanka duty free shops refused to accept Qatar riyals “even though the government has told them to accept it.”
He added that he encountered the same problem wat the money exchanges inside the country.
Hisham Zubair, another Qatar resident who travelled during the Eid break, said that the Qatari currency was not accepted by exchange bureaus at Bangkok airport or at an Indian airport and exchange houses.
A financial analyst at international money transfer firm Imperial FX told a news website that there was “increased concern” in the financial community that Qatar would enter “a persistent economic crisis.”
“The Qatari riyal was trading on the futures market at an annual low, and they have recently been placed on a negative credit watch because portfolio investment funds have left the country so quickly,” Omar Mohammad was quoted as saying.
“Oil prices have fallen and experts are now voicing their concerns over the sustainability of Qatar’s energy revenues,” he said.
The financial expert added that exchanging Qatari riyals was now unprofitable for many banks. “This is because the currency recently depreciated against the US dollar, to which it has been pegged since July 2001.”
Qatar Central Bank (QCB) has reportedly attempted to keep the riyal fixed at around 3.64 per dollar.
However, it has recently reached 3.76 — its lowest level on record, according to Bloomberg data.