South Korea takes measures to stabilize the financial market

Our reporter in Seoul Gu Jinjun

The financial crisis originating from the United States spread rapidly, which aggravated the global financial market turmoil. In order to stabilize the market psychology, the Korean government has taken a number of measures to rescue the market.

On October 19th, the South Korean government announced that it would provide the domestic commercial banks in South Korea with foreign exchange loan payment guarantee totaling 1 billion US dollars with the approval of the National Assembly, which was intended to ease the worries of foreign investors and guarantee the financing channels of Korean banks abroad. In order to alleviate the shortage of dollars in the market, the government has also provided $3 billion in aid to the market through various channels to expand the liquidity of the foreign exchange market. At the same time, in order to stabilize the stock market, the Korean government has formulated a preferential tax policy, which stipulates that long-term holders of stocks or funds will be given tax-free dividends.

the Korean government is also actively seeking to expand the international financial assistance system. In Asia, actively participate in the establishment of a $8 billion foreign exchange reserve fund under the framework of Chiang Mai Agreement, and actively seek to expand the scale of bilateral currency swap through the meeting mechanism of finance ministers of China, Japan and South Korea; In the United States, after consultation with the Federal Reserve Board, a Korea-US foreign exchange swap agreement was finally reached. According to the agreement, as a temporary currency swap arrangement, the Bank of Korea can use the Korean won as collateral to obtain a $3 billion money supply from the United States before April 3 next year.

after the announcement of the above measures, the financial market in Korea has gradually stabilized, the fluctuation of the foreign exchange market has decreased, and the exchange rate of the US dollar against the Korean won has basically stabilized at around 1:13. The popularity of the stock market has also rebounded, and the Seoul composite stock index has recovered to more than 1 points. Despite this, most market participants here are still cautious and wait-and-see, because although the emergency measures have achieved initial results, whether the market can be truly stable ultimately depends on the development and changes of the real economy.

Since November, news of the real economy has been coming out:

Affected by the decline of both export and domestic demand, the automobile industry is blowing cold. Daewoo Bus, the second largest bus manufacturing company in South Korea, decided to lay off 3% of its employees and freeze the existing salary level. "General Daewoo" automobile company decided to stop production of all its three factories from December 22nd to January 4th next year.

The real estate market is sluggish, and the construction industry is facing a severe test. On November 12th, "Xincheng Construction" Company, the backbone enterprise of Korean construction industry, applied for court custody due to insufficient liquidity, which caused a shock in the construction industry. It is reported that since the beginning of this year, there have been nearly 3 Korean construction enterprises with liquidity crisis and more than 15, unsold apartments.

according to the latest statistics of the Korea statistics office, in October this year, 97, people were newly employed in Korea, an increase of only .4% over the same period of last year, which is the lowest increase since February 25. Among them, the manufacturing, retail and construction industries also experienced negative growth.

In view of the grim situation at home and abroad, South Korean President Lee Myung-bak made it clear that the crisis will be overcome by expanding domestic demand in the next one to two years. In order to develop the domestic demand market and increase employment, the South Korean government has decided to make emergency financial investment, including 11 trillion won of public expenditure, which is mainly used to expand employment, support the middle class and the civilian class, and expand social infrastructure construction. It will adjust its tax policy and implement tax reduction support totaling 3 trillion won.

in order to cooperate with the plan of expanding domestic demand advocated by the Korean government, Korean large enterprises have also strengthened coordination and are ready to take action. On November 12th, South Korea's "National Federation of Economic Persons" convened a meeting of heads of 12 large enterprises, at which they reached an agreement on "minimizing foreign investment and expanding the purchase ratio of domestic raw materials".

it is important to expand domestic demand, but export is still the lifeline of Korean economy. Although the international market environment has changed, the Korean government has raised its export target to 5 billion US dollars next year, and will achieve a trade surplus. In order to achieve this goal, the government has taken various support measures for import and export enterprises. In view of the financial difficulties faced by import and export enterprises, especially small and medium-sized enterprises, the Bank of Korea and the Ministry of Finance will provide loan assistance of $1 billion and $6 billion respectively. At the same time, the government also actively guides commercial banks and large enterprises to help small and medium-sized enterprises tide over the difficulties with the concept of "* * *".

although the Korean government and industry are actively responding to the impact of the financial crisis on the real economy, the overall impact cannot be accurately evaluated, so the policy effect is unpredictable. Experts and insiders here all said that it may take until the second half of next year to reach a conclusion.

Egypt's multi-pronged response to the financial crisis

Our correspondent Zhu Guocai in Cairo

The spreading international financial crisis has posed a great challenge to Egypt's economy and has adversely affected some real economies. Horace Telecom, the largest mobile communication company in Egypt, experienced its biggest drop in the Egyptian stock market in the past 22 months last month, with a single-day drop of 8.18%, resulting in a loss of 58% of its share price this year. Similarly, the financial crisis has adversely affected Egypt's financial and banking sector, securities market and economic growth rate. According to Egyptian Prime Minister Nazef, at a recent meeting, due to the impact of the international financial crisis, Egypt's economic growth rate will drop from 7.1% last year to about 6% this year. In addition, the international financial crisis may also have a certain degree of adverse impact on Egypt's pillar industries-tourism, Suez Canal and exports in the foreseeable future.

in order to prevent the international financial crisis from further damaging the Egyptian economy, the Egyptian government has formulated a set of coping mechanisms with the primary goal of ensuring economic growth, and at the same time adopted a looser monetary policy to support the development of the real economy, maintain the investment growth rate, expand employment and maintain the existing living standards of the people.

after the financial crisis, the Egyptian government mainly took the following specific measures.

The first is to adopt a looser monetary policy to support producers and exporters and help exporters to explore new markets. The government provides insurance for exporters to improve the export competitiveness of their products. At the same time, the government is also prepared to increase subsidies for export commodities, reduce various expenses that exporters need to pay, reduce transportation costs, support exporters to participate more in international trade shows, and especially encourage the development of new export markets. The second is to further expand investment in national infrastructure, especially in upper Egypt. The Egyptian government will make great efforts to attract more foreign businessmen to participate in medium and long-term investment projects in Egypt's transportation sector, including investment in Egyptian ports and roads. In addition, the government also plans to further stimulate economic growth by activating the construction market. The third is to further strengthen the management of the Egyptian capital market and improve the securities market. Egypt's Capital Market Authority has decided to amend the laws and regulations on listed companies in the securities market and strengthen the role of listed companies as market players. The fourth is to stabilize the energy market and support industrial development. At a meeting held last month, Egyptian Minister of Investment Muhidin pointed out that the government will take measures to give investors more opportunities to acquire the land needed for investment projects, and keep the price of energy needed for industrial projects stable to ensure that the energy used in these projects will not increase in price. Fifth, in order to prevent the international financial crisis from adversely affecting Egypt's tourism industry, the Egyptian government plans to open up new tourism markets and strive for more tourists to visit Egypt. The sixth is to maintain domestic price stability. At present, the Egyptian government requires local governments at all levels to strengthen price management to prevent price gouging. Seventh, the Central Bank of Egypt promises and guarantees the absolute safety of every citizen's deposits in domestic banks. At present, Egypt's foreign exchange reserves have reached 35 billion US dollars, its financial situation is good, and its foreign exchange rate is stable. The government's goal is to keep the fiscal deficit at 6.6% of GDP and maintain the stability of the Egyptian pound against the US dollar.

Saudi Arabia implements a prudent and steady investment policy

Our reporter Huang Jiangang in Riyadh

In the global rating of countries affected by the financial crisis, Saudi Arabia was rated as the fourth, which is one of the countries least affected. This is due to Saudi Arabia's steady and prudent overseas investment policy and strict financial management measures.

However, the international financial crisis has also had a certain impact on the Saudi stock market. Especially after Lehman Brothers declared bankruptcy, the Saudi stock market fell in the shock. When the stock market reached its lowest point, its market value lost 52%. Economic analysts here believe that the main reason for the decline is the rapid withdrawal of foreign capital from the Saudi stock market and banks, coupled with the sharp decline in oil prices, and investors are worried that the government will suffer losses when buying American bonds. Under the influence of panic psychological factors, the stock market once fell. However, with the government's measures to stabilize the stock market and the announcement of the third quarter operating reports by major Saudi companies, although the profits of listed companies have shrunk, they have remained profitable, making the stock market gradually stable.

In the face of the international financial crisis, the Saudi Monetary Authority reduced the overnight lending rate of banks to 6.63%, and lowered the bank reserve ratio from 13% to 1%. In order to ensure that banks have sufficient liquidity, the Monetary Authority has taken measures to inject capital into banks, and injected capital into domestic commercial banks in US dollars and Riyal respectively, with a total amount of US$ 3.2 billion and Riyal 7.6 billion. On October 25th, the Saudi royal family announced King Abdullah's directive, and the government injected 1 billion rials into the Saudi Credit and Savings Bank. The government's capital injection enabled the bank to spend 8 billion rials, reschedule the repayment period for the delinquents, and provide loans to 18, residents who applied for loans within four weeks, accounting for 8% of the loan demand, thus stabilizing the mood of low-income families and ensuring social stability.

Since September this year, the international oil price has fallen sharply, which has greatly reduced Saudi Arabia's oil revenue. However, Saudi Arabia's oil revenue in the 28 fiscal budget is calculated at $45 per barrel, so as long as the oil price is above $45 per barrel, the Saudi government's budget will not be in deficit. People in the economic circles here believe that if the oil price stays above 6 dollars per barrel, the source of funds for most economic construction projects in Saudi Arabia will not be greatly affected. Petrochemical enterprises are another pillar industry in Saudi Arabia, and the impact of falling prices of international petrochemical products is limited. At present, the average price of international petrochemical products has dropped by 2%, but for Saudi petrochemical enterprises, due to the low cost of raw materials, even if the price of international petrochemical products drops by 5%, Saudi petrochemical enterprises will not suffer losses, and their impact is only a decrease in product income.

As a result of the world economic recession, the prices of grain and industrial products have fallen sharply, reducing the pressure of inflation in Saudi Arabia. Saudi Arabia's industrial products, agricultural products and daily necessities all need to be imported from abroad. At present, the prices of steel, cement and other building materials in the Saudi market have all fallen by 2%-3%, and the prices of food such as wheat and rice are also falling. Some small-scale construction projects that were stopped in the previous stage because of the high price increase of building materials are now started one after another, thus increasing the market demand.

Russia has taken many measures to respond positively

Our reporter in Moscow Li Chuifa

With the spread of the international financial crisis, the Russian economy has also been negatively affected. According to a recent report released by the International Monetary Fund, the financial crisis will lead to a slowdown in Russia's economic growth. It is estimated that the growth rate of Russia's GDP will only be 7% in 28 and 5.5% in 29, which will be much lower than the rapid economic growth target proposed by Russian officials at the beginning of this year.

in order to cope with the negative impact of the growing international financial crisis on the Russian economy, the Russian government has taken a series of positive measures. The Russian government recently announced that the Russian central bank has provided 387.727 billion rubles of loans to major commercial banks in order to fully ensure that the funds of bank depositors are not lost. This measure is of great significance to eliminate people's panic and maintain social stability.

on this basis, Russia has also set up a specialized agency to deal with the financial crisis and stabilize the financial market. On October 2, President Medvedev ordered the establishment of a financial market development committee directly under the President, whose main task is to study financial market issues and submit policy suggestions to the President on safeguarding investors' interests and coping with financial market crises. In order to ensure food supply and prevent speculation, an anti-crisis working group in the agricultural field was also established. In order to support the real estate industry, the Russian government used state funds to buy a number of houses from the market for the implementation of the social welfare housing plan.

Russian Prime Minister Vladimir Putin put forward a supplementary plan to deal with the international financial crisis on October 2th. This supplementary plan includes allocating 2 billion rubles (about 7.7 billion US dollars) from this year's federal budget to state-owned savings insurance companies to ensure the stable operation of domestic banks; The 175 billion rubles (about 6.7 billion US dollars) originally scheduled to be allocated from the budget revenue next year will be transferred to this year in advance to support the domestic financial system and the real economy. In addition, this supplementary plan also involves the revision of tax laws and regulations, including the extension of loan debt to 2 years' installment repayment, and the tax exemption for the income from the trading of securities and investment funds.

another important measure for Russia to cope with the international financial crisis is to try to stimulate the development of the real economy. While protecting the stability of the financial market, Russia has also turned its strategic focus to the real economy, and increased its support for small and medium-sized enterprises and agriculture that are caught in credit difficulties. Russian Deputy Prime Minister and Minister of Finance Kudrin said that the Russian government will use 175 billion rubles of state welfare funds to buy shares of leading Russian companies. It is reported that these funds will be invested in stocks, bonds and securities with high ratings through foreign economic banks.

Russian Prime Minister Vladimir Putin also said that the Russian government will take new measures to support the banking industry and the real economy, and approved an action plan to improve the country's financial and economic situation on November 7. The main measures include: perfecting the bankruptcy mechanism of non-bank financial institutions, formulating the national security mechanism for military housing, providing necessary loan support for large-scale agricultural projects, giving priority to domestic goods in state procurement, providing state guarantees to enterprises that implement government orders when lending, giving government subsidies to military enterprises when repaying loans, increasing support for small and medium-sized enterprises in federal budget funds, stimulating employment and increasing the amount of unemployment subsidies. According to an official from the Russian Ministry of Economic Development, Russia will accelerate the process of investment in transportation infrastructure, and plans to invest 62 billion US dollars in the next six years to start some transportation infrastructure construction projects ahead of schedule to enhance domestic economic demand.