The world economy has been left in turmoil after a series of threats to the global economy had risen in the past few months. The alarm significantly rings as the world’s top nations struggle with their own economic dragons. Germany, Britain, and the rest of Europe experienced a drop in currency exchange against the world standard, the U.S. dollar. These countries are not the only ones to suffer recession as the United States, Japan, and other countries also saw swift decline in their economy. Because there is a need to create solutions to the global crisis, several nations have put their own solutions forward.

Sri Lanka

In Sri Lanka, to boost their forex, the central bank made sure that Ceylon Petroleum Corporation will hedge imports. Although the state-run petroleum company had already been hedging imports since 2007, this time the company had written instructions to do such to preserve the nation’s economy. CPC will buy 900,000 barrels—the volume of which is enough to be consumed until the middle of 2009. Hedging will aid the central bank in keeping its dollars at a level that it can easily manage. However, speculations of mis-selling have arisen although the banks that promoted hedging are quick to defend their stand.

China, Japan, and South Korea

As the world’s economy is in peril, China, Japan, and South Korea agreed to a currency swap deal expansion among themselves. This deal helps whoever among them is in danger of financial collapse or economic suffering. The old deal involves South Korea being able to borrow up to U.S. $4 billion and U.S. $13 billion from China and Japan, respectively. The expanded deal will help strengthen South Korea’s finances as it continues to suffer a decline in its foreign reserve.

South Korea is currently suffering from a shortage of dollar reserves mainly due to the fall of Lehman Brothers Holdings Incorporated, which led to turmoil in the economy with large banks and companies hoarding dollars to keep themselves stable.

Individual States

With United States also taking a blow on its economy, the individual states are also doing their best to develop ways to keep their own economy stable. One great example is the state of Minnesota where the old rule “buy local” is currently being encouraged. As people buy products made from their own state, the dollars will remain in the state that will effectively keep the dollar reserves of that state high.

For the Consumers

Something good has been brought about by the recession, though. Even as each nation as a whole suffers from a decline in its dollar reserves and income, the prices of commodities had fallen as the dollar exchange got higher. However, it could not be said that this will have a good impact on the economy in the long run, but consumers will be expecting further decreases in goods as traders will try to empty their warehouses to prevent huge losses as recession continues.

As the world’s economy is being battered, some good has resulted from it. However, to save the world’s economy, it is still necessary to enforce deals and trades to keep each nation’s reserves within ideal limits.