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

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.