Banks cautious as they keep US$ as Aug 2 deadline approaches

Banks Cautious deadline approaches

In light of the August 2 deadline of raising the United States debt ceiling, banks are holding cash in US dollars and it is considered to be a cautious move in case the deadlock is not solved then. Market sources quote that the United States government is currently rushing to come out with an understanding before August 2 or it might risk having to default their debts and this would be the first time the world superpower house will be doing so. According to Datuk Lee Kok Kwan, the group treasurer and the deputy Chief Executive Officer of CIMB Group, the demand for US dollars in the money market has increased.
He said that there is also a possibility that the United States might have to default on its debt for the first time ever in history as they are not able to reach an agreement on the discussions on raising the debt ceiling from USD14.3 trillion. Market sources quoted that President Barack Obama and the leaders of the congress have already started fresh attempts to come to an agreement on the issue and that they are working out a framework which will form a deal before the deadline which as mentioned is on August 2.


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