S&P Global, the international ratings agency, reduced Qatar’s credit rating to AA- from AA on Wednesday in the latest fallout from the decision by a group of Middle Eastern countries to cut diplomatic and trade ties, media reports said.

The downgrade came as Qatar's currency fell to an 11-year low and its stock market tumbled, a BBC report said.

"We believe this will exacerbate Qatar's external vulnerabilities and could put pressure on its economic growth and fiscal metrics," S&P said.

S&P said it expects Qatar's economic growth to slow, as regional trade falls and corporate profitability declines in the face of reduced confidence.

It said there had been big “non-resident” deposits in Qatar's banks, and an increase in their lending to the government to fund infrastructure projects.

"In our opinion recent events have the potential to destabilise these no-resident deposits and provoke an outflow," said S&P.

It said Qatar may need to use Qatar Investment Authority and sovereign wealth fund money, as well as central bank reserves to tackle any big outflow of funds.

The rating agency said Qatar's economy would suffer from the decision on Monday of Saudi Arabia, the United Arab Emirates, Egypt and Bahrain to cut diplomatic and transport ties with Doha. They accused it of supporting terrorism, a charge that 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 Global said.

S&P put the rating on CreditWatch with negative implications, meaning there was a significant chance of a further downgrade, Reuters reported.

Another major rating agency, Moody's Investors Service, assesses Qatar at Aa3, which is equal to S&P's new rating. Fitch Ratings puts Qatar at AA.