Soros warns of impending financial crisis

Billionaire investor George Soros has warned over an impending crisis in global financial markets, likening the current situation to the crash of 2008.

Speaking at an economic forum in Sri Lankan capital Colombo, Soros said the devaluation of the Chinese yuan is transferring problems to the rest of the world, adding that a return to rising interest rates was proving difficult for developing nations.

The People’s Bank of China guided the yuan lower again on Thursday, setting the midpoint at 6.5646 to the dollar, which was 0.5% lower than Wednesday’s fix.

This marked the biggest drop between daily fixings since the 3% devaluation in August and the yuan’s lowest level against the US dollar for three and a half years.

“China has a major adjustment problem,” Soros said.

“I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”

Soros said developing countries would have to make “harsh choices” as funds are no longer flowing into those nations.

The 85-year old business magnate, famous for speculating against the pound in 1992, contributing to its collapse and exit from the EU exchange rate mechanism, said he was looking at investment opportunities in Sri Lanka.

"I am impressed with this government and what they have achieved in a short period of time," he said.

"Sri Lanka is a bright spot and I think there is great opportunity in tourism."

The comments from Soros, whose Quantum Fund is widely recognised for having the best performance record of any investment fund in the world, came in the same week that Chinese markets suffered a meltdown.

They fell 7% on Monday, while Thursday saw the shortest trading session ever - lasting less than 30 minutes - as a massive drop in the CSI300 triggered the market’s circuit breakers for the second time this week.