WASHINGTON: The US Federal Reserve on Friday offered to provide dollar liquidity to soften the impact of Britain’s exit from the European Union as President Barack Obama pledged to maintain close ties with both the EU and UK.

The referendum results, announced early Friday, triggered global financial and political havoc forcing British Prime Minister David Cameron to announce his plan to resign this fall.

In a move aimed at steadying the financial world, US Federal Reserve announced it was prepared to provide “dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets.”

Such pressures on the global market “could have adverse implications for the US economy” as well, it added.

President Obama had earlier urged British voters not to leave EU as it would have devastating consequences for the British and world economies but on Friday he said he respected the exit vote.

“The people of the United Kingdom have spoken, and we respect their decision,” said Mr Obama in a statement issued by his office.

The US leader pointed that the United States and Britain had a special and enduring relationship and the United Kingdom’s membership in Nato remained a vital cornerstone of US foreign, security, and economic policy.

“So too is our relationship with the European Union, which has done so much to promote stability, stimulate economic growth, and foster the spread of democratic values and ideals across the continent and beyond,” President Obama added.

Canada, IMF support UK

Canadian Prime Minister Justin Trudeau also emphasised this point, saying that the UK and the EU were important strategic partners for Canada with whom it enjoyed deep historical ties and common values. “We will continue to build relations with both parties as they forge a new relationship,” he said.

Mr Trudeau also noted that earlier Friday Prime Minister Cameron indicated his intention to resign by the fall.

“On behalf of all Canadians, I would like to thank him for being such a close ally and good friend to our country,” he added.

Managing Director of the International Monetary Fund Christine Lagarde urged British and European authorities to “work collaboratively to ensure a smooth transition to a new economic relationship between the UK and the EU.”

Published in Dawn, June 25th, 2016