Brexit vote shakes world economy, markets

Posted by News Express | 24 June 2016 | 1,850 times

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Britain’s currency fell to its lowest value in decades and stock indices were shaken as markets reacted to the U.K. voters’ decision to leave the European Union.

“We are well prepared for this,” Bank of England Governor Mark Carney said early Friday. “The Bank of England will not hesitate to take additional measures as required as markets adjust and as the U.K. economy moves forward.”

Carney said that the Bank of England stands ready to provide more than 250 billion pounds in additional funds for its normal market operations.

The economic shockwave of the U.K. decision is being felt across the world. Global oil prices reacted to the Brexit vote by plunging 5.22 percent on Friday. The pound sterling saw its lowest level against the U.S dollar in 31 years early Friday morning, at around $1.3407.

After opening Friday, London’s FTSE fell more than 8 percent.

Crude oil hit as low as $47.55 in an immediate reaction to the vote to leave the EU. After the results were announced, the dollar continued to appreciate against the Turkish lira, to almost three liras, after investors favored safe-haven assets such as the U.S. dollar and gold.

Japan’s Nikkei fell nearly 8 percent, and the euro was down nearly 4 percent.

South Africa’s currency the rand reacted by falling 7.6 percent against the dollar and 11.5 percent against the yen, its weakest point since the 2008 financial crisis.

By 6:30 a.m. (04:30GMT) the rand was trading 6.6 percent weaker at 15.36 per U.S. dollar, its weakest since June 2.

The rand had strengthened against the dollar in recent weeks after falling in December to 16 per dollar when President Jacob Zuma removed two finance ministers in a period of three days.

The EU is one of South Africa’s largest trading partners. (Anadolu Agency)

•Photo shows Bank of England Governor Mark Carney.


Source: News Express

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