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Fitch Ratings cut Qatar’s credit rating down to AA- on Monday as the nation’s row with its fellow Gulf states approaches its 90-day mark.
“International mediation efforts are still ongoing but are not showing significant progress,” analysts Krisjanis Krustins and Jan Friederich said in the Fitch statement, according to the Financial Express. “In our view, the negotiating positions of Qatar and the boycotting countries remain far apart.”
A recent report by Bloomberg pinned Qatar’s economic expansion at its slowest rate in 2017 since 1995. Foreign currency reserves fell eight percent in July, according to official figures, and banks have been instructed to recruit international investors instead of relying on Doha for funding.
Qatar maintains that its liquefied natural gas trade, which tops any other nation, has kept its coffers full to the brim despite the embargo from Saudi Arabia, Bahrain, Egypt and several other Muslim allies. The country’s most recent move has been to restore diplomatic relations with Iran – the country at the core of Doha’s dispute with the Gulf – in order to establish its independence from Riyadh’s tough talk on foreign policy.
Doha dodged the worst logistical obstacles of the blockade by shifting its main export hub from the United Arab Emirates to Oman when the row first became public. Now, Qatar’s energy leaders are optimistic, feeling the ordeal has made the country’s logistics more robust.
Qatar’s wealth plays a large role in preventing it from surrendering to Riyadh’s will. The country’s central bank has $40 billion in cash reserves plus gold, while the Qatar Investment Authority (QIA) has $300 billion in reserves that it could liquidate, the Governor of Qatar Central Bank, Sheikh Abdulla Bin Saud Al-Thani, told CNBC in an interview in early July, one month into the blockade.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…