DUBAI • Foreign deposits at Qatar’s banks may fall further after dropping the most in almost two years in June as some Gulf lenders refuse to roll over holdings, people with knowledge of the matter said.

Some banks based in Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, aren’t extending deposits with Qatari lenders when they mature, said the people, asking not to be identified because the information is private. These banks are concerned that they could face repercussions from their governments for continuing business relations with Qatar after they cut ties with the country, the people said.

Lenders are also struggling to repatriate funds because their counterparts in Qatar aren’t swapping riyals into dollars, two of the people said. Banks can either roll over their riyal deposits or convert them into dollars in the offshore market where they get a worse exchange rate than Qatar’s pegged official rate, they said.

Gulf-based banks placed deposits with the 18 lenders in the world’s biggest liquefied natural gas exporting nation earlier this year as its local inter-bank rate reached the highest in the region. Non-resident deposits in Qatari banks in June posted their biggest decline since November 2015. — Bloomberg