The esteemed initiative delivered essential grocery food baskets to around 5,000 deserving families across 14 Bangladeshi districts
Global equity markets tumbled as investors dumped both stocks and the dollar on fears that more US banks could be vulnerable to the credit crisis that sank Bear Stearns, which was the fifth biggest investment bank in the United States.
Oil prices paused after striking very close to 112 dollars per barrel in early trade. Gold also pared gains after its record 1,032.70 dollars per ounce in London.
The European single currency reached a record high of 1.5905 dollars in Asian trade on Monday. In later European trading, the euro stood at 1.5787 dollars, up from 1.5669 late on Friday in New York.
Against the Japanese currency, the dollar fell by as much as 3.5 percent to hit 95.75 yen, a level not seen since September 1995.
“The market’s insecurity and worries over the US economy sent the dollar plummeting,” said Masaki Fukui, senior economist at Mizuho Corporate Bank.
In a rare weekend announcement, the US Federal Reserve said it was cutting by a quarter-point to 3.25 percent its primary credit rate, which is offered at the Fed’s discount window for institutions ”in sound condition.”
The move came amid growing concerns about the health of the US financial system following the woes of the collapsed Bear Stearns.
Analysts said the rate cut underscored the extent of the problems facing the world’s largest economy due to a housing slump and credit crunch sparked by a wave of defaults on subprime, or high-risk, mortgages.
“Investors seem to have taken these moves as evidence of the deepening of the credit crisis,” NTT Smarttrade director Takashi Kudo said.
“Investors also seem to think that the Fed’s action was a little too late.”
Asian and European stock markets plunged on Monday, tracking Wall Street lower.
JPMorgan Chase announced Sunday that it would acquire Bear Stearns for about two dollars a share, making the sale worth about 236 million dollars, a tiny fraction of the group’s stock market value of 3.54 billion dollars on Friday.
“The Federal Reserve’s first rescue of a broker since the Great Depression has heightened investor fears that the fallout from the credit market crunch has much further to go,” noted NAB Capital analyst John Kyriakopoulos.
Traders are expecting a cut of 50 or 75 basis points to the US central bank’s key federal funds rate on Tuesday.
Markets are even pricing in a chance that the central bank will slash the benchmark rate by 100 basis points to 2.0 percent, dealers said.
“There are a lot of negative factors against the dollar in the pipeline, including a deeper rate cut. That’s why it is difficult to stop the dollar’s decline,” said Bank of America economist Tomoko Fujii.
Meanwhile, currency investors ploughed more cash into commodities as they sought refuge from tumbling world stock markets and US recession fears, analysts said.
“The depreciating dollar has meant market participants are looking to US dollar denominated commodities to hedge against inflation and their forex exposure,” said Sucden analyst Nimit Khamar.
In London currency trading on Monday morning, the euro changed hands at 1.5787 dollars against 1.5669 late on Friday, at 153.20 yen (155.46), 0.7833 pounds (0.7748) and 1.5503 Swiss francs (1.5639).
The dollar stood at 97.04 yen (99.18) and 0.9821 Swiss francs (0.9978).
The pound was at 2.0164 dollars (2.0317).
On the London Bullion Market, the price of gold stood at 1,025.24 dollars per ounce, up from 1,003.50 dollars late on Friday.
New York oil added 10 cents to 110.31 dollars on Monday.
The esteemed initiative delivered essential grocery food baskets to around 5,000 deserving families across 14 Bangladeshi districts
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