Qatar's investigation into alleged manipulation of its currency could give it more control over exchange rates but make some international banks more wary of doing business with Doha.
The probe may also risk prompting Qatar's diplomatic enemies to impose more economic sanctions on it, if their banks are targeted in the investigation.
"The risk is if the other Gulf countries, say Saudi and the UAE, react to this campaign by Qatar against currency manipulation by imposing fresh sanctions on Qatar," said Jason Tuvey, an economist at Capital Economics in London.
"In particular, if they try to prevent their own banks from dealing with Qatari banks."
Qatar's central bank said on Tuesday that it had launched a legal investigation into attempts by countries opposed to it to harm the Qatari economy by manipulating the currency, securities and derivatives markets.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt imposed an economic boycott on Qatar in June, accusing it of backing terrorism, which it denies.
In Tuesday's statement, Qatar did not specify how the other countries were trying to sabotage its markets.
But Qatari central banker Khalid Alkhater told Reuters last month that some banks from nations boycotting Qatar were trying to manipulate the riyal by trading it between themselves offshore at artificially weak levels, to create an illusion that the riyal was under pressure.
He said a similar attack had been made on Qatari bonds, though it had failed because the bond market was illiquid and because Doha had taken precautionary steps. Other Qatari officials have accused boycotting countries of trying to undermine Doha's stock market by dumping shares.
Qatar's central bank said it hired New York law firm Paul, Weiss, Rifkind, Wharton & Garrison to lead its probe. That firm was among legal advisers to Deutsche Bank when it was accused of rigging interest rates in 2015; Deutsche agreed to pay $2.5 billion in a deal with U.S. and British regulators.
A number of financial institutions and individuals have been asked to preserve documents in advance of legal proceedings, the central bank said without naming them.
Bankers in the Gulf said the threat of the probe was likely to make banks more cautious about trading riyal in the offshore foreign exchange market, for fear of leaving themselves exposed to accusations of manipulation.
Since the boycott was imposed, the riyal has sometimes traded offshore at levels several percent weaker than in the onshore market, where the vast majority of activity occurs and where the currency has stayed near its official peg of 3.64 to the U.S. dollar.
By deterring offshore activity, Qatar may force even more currency trade onshore, where it can be monitored and the central bank can more easily take action against institutions which appear to be trading without commercial motives.
A portfolio manager at a Dubai-based bank said Qatar's central bank was already identifying institutions which were selling the riyal and inquiring about motives behind the trades.
Some banks doing business with Qatar have begun to prepare for any potential legal challenges arising from the probe by checking documents and electronic records of their riyal transactions, banking sources said.
One danger for Qatar is that the costs of these legal precautions, and the perceived risk of being caught up unwittingly in the investigation, could deter international banks from doing legitimate business there.
"As a financial institution you're running a reputational risk, especially if your bank has a licence in Qatar," said the portfolio manager.
Last month, equity index compiler MSCI said it would consider using offshore exchange rates to value Qatari stocks - a move that could hurt the stocks' weightings in international indexes - because some foreign investors were finding it difficult to obtain riyal onshore.
MSCI ultimately decided not to make the change after the Qatari central bank pledged to supply all investors' currency requirements. But if more foreign banks withdraw from the market and liquidity suffers, the problem of access to riyal could emerge again.
Qatar's legal action may eventually come to resemble litigation in the United States, where private investors have filed suit accusing over a dozen international banks of rigging prices in the roughly $5.1 trillion-a-day foreign exchange market. Many banks have settled the litigation.
If Qatar attempts to take action against banks from the boycotting countries, however, those banks' governments could respond with tougher action against Doha. So far they have warned their banks to be wary of doing business in Qatar, but have stopped short of an outright ban.
Officials from central banks or other government institutions in the four countries did not respond to requests for comment.