Even Oil-Rich Gulf States Hit by Financial Storm

Global woes descend on Persian Gulf oil economies with a fury
By Jim O'Neill,  Newser User
Posted Oct 27, 2008 9:51 AM CDT
Kuwaiti investors follow the indicator boards showing the downturn of shares prices at Kuwait Stock Exchange in Kuwait City on Sunday, Oct. 26, 2008.    (AP Photo/Gustavo Ferrari)
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(Newser) – The financial crisis has finally struck the Persian Gulf—the one area of the world that had seemed immune—as a 50% plunge in oil prices since July and a raft of currency trades gone bad has led to the first bank bailout in the area. Kuwait’s central bank yesterday guaranteed deposits and arranged a cash infusion into one of the country’s largest banks, and Saudi Arabia pledged $2.3 billion in loans to low-income borrowers, reports the Wall Street Journal.

Markets across the region—which had been among the best-performing in emerging economies—are seeing a Wall Street-style dumping of shares as investors look to hedge their bets and bank some cash. The torrid real estate market also is seeing a rapid cooling as international capital pulls out and speculators run for cover.