BusinessFrontNewsTop StoriesWorld

Greece shuts banks to avert collapse after ECB freezes aid

The euro fell almost 2% and share prices tumbled across Asia on Monday as GreeceGreece looked set to default on its debt repayment this week, forcing Athens to impose capital controls to halt bank runs.

With the prospect of Greece being forced out of the euro in plain sight, the common currency fell as much as 1.9% to $1.0955, its lowest in almost a month, and last stood down 1.4% at $1.1007.

Against the yen, the common currency dropped more than 3 percent to 133.80 yen, a five-week low.

U.S. stock futures dived almost 2% at one point to hit a three-month low, and last traded down 1.6%.

Japan’s Nikkei fell 2.1% while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.4%.

Chinese shares were volatile and whipsawed between positive and negative territory, with the Chinese central bank’s measures on Saturday to support the economy unable to calm jittery investors.

The central bank simultaneously cut interest rates and reserve requirements for the first time since the global financial crisis in late 2008.

“It’s a bit surprising that both the cut in interest rates and RRR in China have come at the same time. It shows that the Chinese policymakers feel a sense of urgency,” Christopher Moltke-Leth, head of client trading at Saxo Capital Markets.

“Asia is down because of a risk-off move in response to what’s going on in Europe, in Greece.”

Investors are flocking to safer assets, staggered by uncertainty over the future of Europe, as Greece could become the first country to leave the currency bloc after a default.

Any speculative selling of debt of such countries as Italy, Spain and Portugal will also likely be countered by the European Central Bank, which started buying euro zone sovereign debt from the markets in March to shore up the economy.

Yet perceptions could change if investors grow more worried about the future of the currency union, including whether Greece can stay within the euro zone after default.

Some investors think Greece’s attempt to abandon the austerity programme – and possibly reset its economy through currency devaluation – could fuel more scepticism towards the euro project among the populace in other euro zone countries.

NMTV

NMTV was launched in the year 1999, and is Maharashtra only accredited 24-hour, 7-day-a-week local cable news station of Navi Mumbai airing news bulletins and programs in English, Hindi and Marathi. NMTV represents the state-of-the-art in local television news coverage, delivering on a commitment of responsible and community-oriented journalism on an around-the-clock basis.

Related Articles

Back to top button