DUBAI, United Arab Emirates, Nov. 27 (UPI) -- A statement by United Arab Emirates news agency WAM says restructuring Dubai World debt is carefully planned and reflects its specific financial position."
Chairman of the Supreme Fiscal Committee Sheik Ahmed bin Saeed al-Maktoum said the UAE government "is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react." Dubai World holds the major portion of Dubai's estimated $80 billion debt.
"Our intervention in Dubai World was carefully planned and reflects its specific financial position," al-Maktoum said.
The statement released late Thursday may have been timed to coincide with the market day off for U.S. Thanksgiving and the Eid al-Adha holiday in the Gulf region.
The dollar fell to a 15-month low while gold threatened to break $1,200 at Friday's open. Initial market response was harsh Wednesday for European bank shares with exposure to Dubai following announcement by Dubai World it seeks to delay payment on its debt. Credit Suisse lost 3.5 percent, HSBC 4.3 percent, Lloyds 3.9 percent and the Royal bank of Scotland 4.2 percent. The yen hit a 14-year high of 84.83 to the dollar.
Stock markets also dropped sharply. The Nikkie 225 in Japan lost 3.22 percent, while the Hang Seng index in Hong Kong dropped 4.84 percent.
On Thursday, the FTSE 100 in Britain lost 1 percent, the largest one-day tumble since March.
"Dubai has experienced its share of economic and social challenges in this global downturn," the statement noted. "This is a sensible business decision."
