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Pound Hits 31-Year Low As BoE Gov. Mark Carney Weighs In On Brexit

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Pound Hits 31-Year Low As BoE Gov. Mark Carney Weighs In On Brexit

The British pound traded at a new post-Brexit low on Tuesday after the country's central bank stepped in to help support the now fragile economy and uncertain outlook.

The Bank of England said on Tuesday it will lower the amount of capital that the country's banks are required to hold in reserve. The move is expected to free 150 billion pounds (approximately $198 billion), which can now be allocated toward lending.

"Those businesses and households who want to seize viable opportunities in the post-Brexit world can be confident that they will be supported by the financial sector," Bank of England Governor Mark Carney was quoted by The Guardian as saying.

Reuters noted that business confidence fell sharply in the immediate days following the Brexit vote, while the country's services industry expanded at its slowest pace in three years in June due to Brexit concerns.

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Carney said this move represents a "major change," as three quarters of banks will benefit from immediate flexibility to supply credit to households and firms.

Nevertheless, currency traders and investors punished the pound, which traded as low as $1.3115, marking a new 31-year low against the greenback.

The pound traded as high as $1.5819 over the past 52 weeks.

Posted-In: Bank Of EnglandNews Eurozone Politics Forex Markets Media General Best of Benzinga

 

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