Standard & Poor’s cut its long-term rating of Qatar by one level on Wednesday, from AA to AA- and put the country’s rating on CreditWatch with negative implications, indicating a good possibility of a further downgrade.

The S&P’s decision came as Qatar’s riyal fell to an 11-year low after the United Arab Emirates, Saudi Arabia, Bahrain and Egypt cut ties with the nation due to its alleged support of terrorism (which Qatar denies).

“We expect that economic growth will slow, not just through reduced regional trade, but as corporate profitability is damaged because regional demand is cut off, investment is hampered, and investment confidence wanes,” S&P said.

Qatar’s stock index has plummeted 9.7 percent in the past 3 days, a drop largely fueled by international investors pulling out of the market and returning their money to their home countries. Before the withdrawals, Gulf and international investors held only about 9 percent of the country’s stock market cap, which may indicate that the economy will remain strong despite the pullouts.  

Despite the current economic turmoil, Qatar is still one of the wealthiest countries in the word, with an estimated $335 billion of assets in its sovereign wealth fund. Its domination of the liquid natural gas (LNG) markets brings the country approximately $2.7 billion in trade surplus monthly.

Most analysts, however, expect Qatar’s exports to continue despite the current political sanctions, which is likely to continue propelling Qatar’s economy forward. Qatari central bank officials also reported to Reuters that the country has significant foreign reserves that can be used to bolster the riyal if needed. The riyal is pegged at 3.64 to the dollar by the central bank, to prevent substantial fluctuations. Nevertheless, the U.S. dollar bid was as high as 3.6526 riyals on Wednesday, its highest level since July 2005.