Qatar riyal sinks in forwards market on loan concern – traders

Qatar’s riyal fell sharply in the forward foreign exchange market on Wednesday as traders cited concern that Qatar might have trouble agreeing with banks on the pricing of a syndicated loan of up to $10bn.

The drop was part of widespread volatility in money markets across the Gulf in the last few weeks, caused by worries over the ability of state finances and economies to withstand a prolonged period of low energy prices.

One-year US dollar/Qatari riyal forwards rose as high as 312 points on Wednesday, their highest level since February 2009 during the global financial crisis, from 250 points on Tuesday.

Earlier this month, bankers said Qatar was in talks with international banks to borrow up to $10bn to help cover its expenses. The world’s top natural gas exporter’s income has been slashed by low oil and gas prices.