Financial turmoil could hurt Asia over six months: Singapore PM

Singapore (Antara News) - Asia could feel the impact of turbulence that rocked global markets over the next three to six months but the region's foundations remained strong, Singapore Prime Minister Lee Hsien Loong said.

The region would be affected if the volatility, which saw stock markets around the world plummet from fears of a global credit crunch, starts to dent US consumer confidence, he was quoted by AFP as saying late Sunday.

"If consumer confidence weakens in (the) US, then the economies in Asia and Singapore will be affected," he said in his annual National Day Rally speech on local television.

"Even if it does, the fundamentals in Asia remain strong and so too for Sinapore."

US and European stocks staged a strong recovery Friday after the Fed took markets by surprise by slashing its discount rate, the interest rate charged on loans to commercial banks, by a half-percentage point to 5.75 percent.

The cut was the first time the US central bank had acted outside regular rate-setting meetings since 2001, in the aftermath of the September 11 terror attacks. As a result, Asian stocks were stronger in trading Monday.

Growing fears of a credit crunch, caused by the crisis in risky US subprime home loans, have played havoc on Wall Street with investors unable to determine the full extent of the crisis. (*)
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