Jeddah- Qatar’s intransigence, rejection of all the political moves taking place to settle the dispute and the implementation of the 13 demands of the four boycotting countries is putting pressure on Doha’s local economic situation, which depends on implementing many infrastructure projects on banks and banking institutions that has entered a critical stage after more than a month from the beginning of the crisis.

Experts in the banking sector say that there are a series of challenges faced by Qatari banks, mainly reducing the spending in the form of loans to maintain liquidity amid the low interest rates among banks in Qatar, concerns due to the lack of foreign currency in the country and also Qatar’s continuance of spending to fund construction projects for the World Cup as the average rate of loans to deposits in Qatari banks has amounted to around 111.6 percent.

This will put pressure on Qatari banks in facing the weakness of the riyal and the foreign exchange gap in case expatriate workers transfer their savings to their countries.

The non-resident deposits constitute around 24 percent of the total deposits in the 18 lending institutions in Qatar for April 2017, according to press reports, which pointed out that the boycott will primarily affect Qatar and its partners, especially that Qatar’s choices will not help it in overcoming the crisis due to the increased pressure faced by its local banks.

Expert in the Islamic banking Dr. Salah Shalhoub told Asharq Al-Awsat that the boycott by the four Arab countries for Qatar in light of its intransigence has contributed in reducing the opportunities for Qatari banks, which largely target Gulf investors whether through their investments in banks, buying shares, investments in buying the instruments owned by these banks or even through various commercial activities in which banking transactions are needed.

Shalhoub noted that Doha’s relations with the boycotting countries are essential for the formation of other foreign relations, so the damage will not only be limited to neighboring countries but also beyond taking into consideration the fact that countries in Europe and America and others are concerned about investing in Qatar. If this crisis lasts any longer, this concern will turn into risks.