If the collapse in Qatar's bond and stock markets was not enough to warrant concerns, the Riyal peg is now coming under great pressure as FX forwards crash to their weakest on record
It is clear that this is not just speculation in the forwards market, as the spot market has also been slammed, presumably by outflows, sending it to its weakest since 1998...
This is not the first time the Riyal peg has come under pressure. As the chart above shows, the last time speculators bet against the peg holding, some quick jawboning by the central bank chief saved the day...
The Qatari riyal's peg to the U.S. dollar has been of great benefit to Qatar's economy, the country's central bank governor Sheikh Abdullah bin Saud al-Thani said in an interview published on the central bank's website on Monday.
Asked by the local Lusail news website about the fluctuations of the dollar against other currencies, Sheikh Abdullah replied:
"Such concerns do not exist for us - as you know the U.S. economy is the strongest in the world and depreciation of the dollar against some foreign currencies is usually in small percentages over a limited amount of time.
"And our long experience with the riyal peg against the dollar has proved to us that it is best for our economy to continue this peg as it has many benefits.
"This peg in recent decades has spared us many of the risks associated with exchange rates, and has contributed to a large reduction of imported inflation, which has a role in the retreat of domestic inflation."
"Keeping in mind the increase in the high level of capital, and a reduction in non-performing loans, the banks have great space to withstand any additional pressures in the system if they appear,"
We suspect however that things are a little different for Qatar this time.