The Qatari riyal fell against the U.S. dollar in the spot and forwards markets early on Tuesday because of concern about the long-term economic impact on Qatar after Saudi Arabia and the United Arab Emirates severed ties with it.

The dollar was bid at 3.6470 riyal in the spot market, its lowest level since June 2016, according to Thomson Reuters data. The currency is pegged by the central bank at 3.64 to the dollar; the central bank only allows small fluctuations around this level.

One-year dollar/riyal forwards traded as low as 275 points, compared to Monday’s close of 250 points and levels around 180 bps before the diplomatic crisis erupted.

The new levels still did not indicate very heavy pressure for depreciation of the riyal beyond its peg; one-year forwards implied depreciation of less than 1 percent over the next 12 months.–REUTERS

Source: National News Agency

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