In a clear disapproval of the ongoing standoff between Qatar and its Gulf neighbours Saudi Arabia and others in the region, international agency Standard and Poors has downgraded Qatar's credit rating and put the country on credit watch with "negative implications".

The agency said it had lowered the rating on Qatar's long-term debt to 'AA minus'.

S&P said in a statement on Wednesday that the severing of diplomatic and business links by the Gulf combine and Egypt with Qatar, the world's largest producer of natural gas, "will exacerbate Qatar's external vulnerabilities and could put pressure on economic growth and fiscal" stability.

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

The oil-rich Qatar has been isolated by its neighbours, including Saudi Arabia, Egypt, Bahrain and the United Arab Emirates since early this month. The influential Saudi-led OPEC bloc largely believes that Qatar has been backing militant groups, including the Islamic State (IS) and al-Qaeda through funding, intelligence and logistics support. Qatar has strongly refuted the allegations.