Spain rattles markets as Valencia is seeking for funding help

Fears that other Spanish regions may follow Valencia in seeking a bailout from Madrid have rattled markets.

A local newspaper in Murcia, one of Spain’s smallest regions, quoted the regional government’s head as saying it would ask for funding help of up to 300 million Euros.

On Friday Valencia asked the central government for a financial lifeline.

The yield on Spain’s 10-year bond jumped to 7.4%, while the euro fell to an 11-year low against the yen.

On Friday the bond yield – which implies the interest rate the government would have to pay to borrow new money, and acts as a measure of investor confidence in Spain’s creditworthiness – was at 7.28%.

 

Fears that other Spanish regions may follow Valencia in seeking a bailout from Madrid have rattled markets

 

Many of Spain’s regions have high borrowing needs, and speculation is growing that a number of them will follow Valencia and ask formally money from Madrid at a time when the central government itself is having trouble borrowing money.

In Asian trading overnight, the euro fell to an 11-year low against the Japanese yen – which has acted as a safe haven currency since the 2008 financial crisis – amid fears that debt problems in Spain are worsening.

The euro fell to 94.37 yen, its lowest level since November 2000.

Analysts said the developments in Spain had raised fears that the eurozone debt crisis was worsening and spreading to the region’s biggest economies.

Asian stock markets also fell on Monday amid fears that the ongoing debt problems in eurozone will hurt the region’s growth.

Japan’s Nikkei 225 index fell 1.9%, South Korea’s Kospi dropped 1.8% and Australia’s ASX 200 index shed 1.7%.

The eurozone is a key market for Asian exports and there are concerns that demand from the region may decline in the near term.

At the same time, a weaker euro has also added to the woes of Asian exporters, as it makes their goods more expensive for buyers from the region.

 

Clyde K. Valle

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.

Recent Posts

Donald Trump and Elon Musk Celebrate Election Victory at UFC 309

Image source: Wikimedia Commons President-elect Donald Trump celebrated his election victory at the Ultimate Fighting…

5 days ago

White House 2024: Donald Trump Wins, Kamala Harris Calls Him to Concede Election

Millions of voters across the US chose to return Donald Trump to the White House…

2 weeks ago

Who Won? Donald Trump Declares Victory as He Addresses Jubilant Supporters in Florida

Donald Trump declares victory in the US election as he addresses jubilant supporters in Florida.…

2 weeks ago

Stocks Soaring as Donald Trump Closes in on US Victory

Stocks around the world are rising as Donald Trump appears to be on the cusp…

2 weeks ago

Who Won? Kamala Harris Cancels Election Night Party as Path to Victory Narrows

Donald Trump has won Pennsylvania, North Carolina and Georgia and taken a lead over Kamala…

2 weeks ago

Quincy Jones Dead at 91

Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…

2 weeks ago