The effects of the deteriorating relations between Gulf states and Qatar have reached Pakistan as currency dealers in Pakistan have started to discontinue the buying and selling of Qatari Riyals.
According to Dunya News, currency dealers in Pakistan, especially in Rawalpindi s currency market, are refusing to convert or buy Qatari Riyals. This is having an adverse effect on families of Pakistanis working in Qatar as they are facing difficulties in converting the Qatari Riyals sent by their family members working in Qatar into Pak Rupees.
This practice of not buying and selling in Qatari Riyals is being carried out in the country since three days. Families of Pakistanis working in Qatar are facing great difficulties as in the month of Ramazan, with the Eid approaching, they are unable to buy anything as they are in possession of a currency that no one is willing to convert.
On Monday, the Gulf region plunged into a diplomatic crisis as Arab nations including Saudi Arabia, United Arab Emirates, Bahrain and Egypt cut off ties with Qatar. Qatari diplomats were ejected; air, land and sea routes were closed off and Qatari residents were given two weeks by these countries to leave. The reason given for this move was Qatar s support of terrorism and its hand in destabilising the region. Analysts claimed that Qatar s support of the Muslim Brotherhood and its tolerance of Iran were the reason why Saudi Arabia and its allies cut off ties with Qatar.
Moreover, according to reports, the Qatari currency has come under pressure as Gulf commercial banks have started putting a halt to their dealings with Qatar. According to Reuters, the current exchange rate between US Dollars and Qatari Riyal is at its lowest point since June 2016. Saudi Arabia s central bank has advised banks in the kingdom not to trade with Qatari banks in Qatari Riyals. Furthermore, central banks in the UAE and Bahrain have also asked respective banks in their countries to report their exposure to Qatari banks. Reuters has also reported that banks in Sri Lanka have stopped buying Qatari Riyals, saying that their counterpart banks in Singapore had advised them not to accept the currency.
Initially, it had seemed that the effects of this rift will stay in the Gulf region and won t spillover into the surrounding region. But with currency dealers in Pakistan refusing to convert Qatari Riyals, banks in Sri Lanka and countries as far off as Singapore refusing to deal with Qatar, it seems that Gulf tensions will not only be detrimental to the surrounding region and close allies of the involved parties, but will negatively affect all the countries that had some sort of economic and financial linkage with Qatar.