Even Oil-Rich Gulf States Hit by Financial Storm

Global woes descend on Persian Gulf oil economies with a fury
By Jim O'Neill,  Newser Staff
Posted Oct 27, 2008 9:51 AM CDT
Even Oil-Rich Gulf States Hit by Financial Storm
Kuwaiti investors follow the indicator boards showing the downturn of shares prices at Kuwait Stock Exchange in Kuwait City on Sunday, Oct. 26, 2008.    (AP Photo/Gustavo Ferrari)

The financial crisis has finally struck the Persian Gulf—the one area of the world that had seemed immune—as a 50% plunge in oil prices since July and a raft of currency trades gone bad has led to the first bank bailout in the area. Kuwait’s central bank yesterday guaranteed deposits and arranged a cash infusion into one of the country’s largest banks, and Saudi Arabia pledged $2.3 billion in loans to low-income borrowers, reports the Wall Street Journal.

Markets across the region—which had been among the best-performing in emerging economies—are seeing a Wall Street-style dumping of shares as investors look to hedge their bets and bank some cash. The torrid real estate market also is seeing a rapid cooling as international capital pulls out and speculators run for cover.
(More financial crisis stories.)

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