CNY, the Chinese currency, plunged to a six-week low on Tuesday, after the central bank cut its key interest rate to a record low of 0.25% for the first time in two decades.
The central bank’s decision capped a tumultuous week in which the currency plummeted by more than 20% against the dollar in the first 24 hours after the government announced that the central banking board would hold an emergency meeting to discuss a plan to revive the economy.
The move triggered massive panic selling in the Chinese financial market, triggering a global sell-off and plunging the country into a recession.
China’s central bank said it will keep the benchmark rate steady for at least another week, after its policy meeting.
The market panic in China has now spread to global markets, causing a market rout and triggering a steep drop in stocks and bonds.
A market rout could send the dollar lower, putting pressure on the Fed’s bond-buying program.
Some of the worst-hit markets have been Hong Kong, Singapore, Tokyo and Seoul.
Hong Kong’s Hang Seng, Singapore’s Raffles Stock Exchange and Seoul’s Hang Namsan Stock Exchange fell at least 4% in early trading on Tuesday.
A Seoul court ordered the arrest of a prominent politician and the closure of the country’s largest shopping mall.
The ruling Communist Party on Tuesday ordered the removal of two lawmakers and suspended two others on suspicion of taking bribes.
The Hong Kong and Singapore stock markets closed lower as investors feared the ruling party might attempt to end the central government’s grip on the city’s financial markets.
South Korea’s Seoul Central District Court ordered the release of five people arrested in the central city of Gwangju for allegedly trying to take bribes from a foreign firm.
The court also ordered the resignation of a deputy party secretary and a member of parliament over corruption allegations, according to the Yonhap news agency.
In South Korea, the ruling Saenuri Party said it was taking steps to ease the economy as it tries to recover from the global financial crisis and the fallout from the central banks decision to hold an extraordinary meeting to revive growth.
After a two-day holiday, South Korea’s government is expected to announce a new round of measures to stabilize the economy, including lifting a moratorium on new businesses and an overhaul of tax collection and distribution laws.
The government has also urged its citizens to spend more to help support the economy amid rising inflation and the possibility of an end to the countrys prolonged economic crisis.
North Korea on Monday declared a state of emergency and ordered the government to prepare for a major economic collapse as the country tries to cope with the shock of the global currency crisis.
The emergency law, which was announced by the National Security Council, gives the president broad powers to declare a national emergency.
Pyongyang’s state media said the government is preparing to declare the economy in a state “of collapse” to respond to the “international threat of financial collapse and global financial instability.”
The government also plans to start the construction of new housing projects in the capital Pyongyang, North Korea’s state-run KCNA news agency reported.
The agency cited the president as saying Pyongyang plans to build more than a million new houses, and more than 5,000 apartments.
The city also plans more than 7,500 new public buildings and a total of 13,000 offices and factories, it said.
Despite a slowdown in the economy and the economic slowdown in Asia, the South Korean economy continues to expand at a strong clip, despite the severe downturn caused by the global economic crisis and its effects on the country.
The economy grew at a 5.4% annualized rate in the third quarter, according an IMF survey released on Tuesday by the agency.
The U.S. and China both posted GDP growth of less than 2% during the quarter, and the euro fell to a 12-month low.
Read more: The Global Financial Crisis and the North Korean Economy” The world is witnessing the greatest financial crisis in history.
The situation is far from normal.
While the global economy is recovering, the world is still in deep crisis and global markets are still in a negative environment,” said a South Korean government official, speaking on condition of anonymity.
China’s central government on Monday warned of a global economic collapse after the Reserve Bank of China cut its benchmark interest rate from 0.5% to a new record low.
The central bank reduced its key rate to zero, the lowest in more than two decades, in response to an unprecedented drop in the yuan.
The bank said in a statement that the move was “in line with the Reserve’s decision to lower the benchmark interest rates for the coming weeks.”
On Tuesday, the People’s Bank of Singapore cut its overnight rate to an all-time low of 1.75% to ease financial pressure on Chinese investors, according