A painting depicting Qatar’s Emir Sheikh Tamim Bin Hamad Al-Thani is seen as people gather to watch players from Spain's national team in Mall of Qatar in Doha, Qatar July 5, 2017.REUTERS/Naseem Zeitoon
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A month after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic, trade and transport ties with Qatar, accusing it of backing terrorism, it is suffering from isolation but is nowhere near an economic crisis.Saudi media reported this week that the new sanctions would include a pullout of deposits and loans from Qatar by banks in alliance states, and a "secondary boycott" in which the alliance would refuse to do business with firms that traded with Qatar.Qatar's most vulnerable point is probably its banks' dependence on foreign funding.Saudi, UAE and Bahraini banks have already largely frozen new business with Qatar because of guidance from their central banks; some jittery foreign banks have followed suit. A senior Qatari financial official estimated institutions from Saudi Arabia, the UAE and Bahrain had $18 billion of deposits in Qatari banks that would mature in two months and which may not be renewed. A secondary boycott against Qatar might prove less effective than pulling money from its banks.
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