Riyadh – Qatar’s stock market has witnessed its biggest drop in 18 months, as the crisis between the country and neighboring nations escalated.

The decision of several countries to cut diplomatic relations with Doha had its direct impact on the Qatar Stock Exchange (QSE) as it lost 720.98 points (-7.27 percent) when the bourse closed trading at 9,202.62 points Monday.

Many of the central banks of the states that cut ties with Qatar also stopped the buying or selling of the Qatari riyal.

Qatar Islamic Bank (QIB) shares dropped 8.2 percent, their lowest in 18 months, whereas Qatar Fuel Company (Woqod) index dropped 4.8 percent.

Taiwan’s Evergreen and Hong Kong’s OOCL announced they had suspended shipping services to Qatar in another sign of trade pressure.

Evergreen, world’s sixth container shipping line, said in a statement that in light of the blockade imposed on Qatar it had suspended services until further notice.

OOCL, the world’s no. 7 carrier, said “in response to the current political climate in the region, all OOCL booking to/from Qatar is suspended until further notice”.

Qatar’s credit quality would decline if tensions with its Gulf neighbors continue for much longer, raising the country’s debt ratio and hurting banks’ liquidity, Moody’s ratings agency said on Thursday. It currently rates Qatar at A3 with a stable outlook, or four notches above junk.

Moody’s explained that an escalation could include restrictions on capital flows, which would be negative for Qatari banks’ liquidity and funding, adding that total external debt was 150 percent of gross domestic product.

In related news, Qatari riyal fell to an 11-year low against the US dollar in the spot market in late trade on Wednesday due to concern about the long-term economic impact on Qatar of its diplomatic rift with other Gulf Arab states.

The dollar was bid at 3.6517 riyals, its highest level since July 2005, according to Thomson Reuters data. The riyal is pegged at 3.64 to the dollar by the central bank, which only allows small fluctuations around this level.

The riyal remained steady at a premium of 250 points to the dollar in the one-year forwards market, which banks use to hedge against future moves in the spot rate.

A Qatari central bank official told Reuters on Tuesday that Qatar had huge foreign reserves which it could use to support its currency if necessary.