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Australia's exposure to Brexit limited: PM

Xinhua, June 24, 2016 Adjust font size:

Australia has called for cool heads to prevail as the United Kingdom edges towards an exit from the European Union.

British media organizations have called the U.K.'s referendum on European Union membership in favor of the Leave campaign as the vote count hit 51.7 percent at 1400 local time (AEST) on Friday, causing massive sell-offs and a flight to safe haven assets.

"There is no cause for Australians to be alarmed by these developments, however there will be a period of uncertainty and some instability in global markets," Australian Prime Minister Malcolm Turnbull told reporters in Tasmania state on Friday.

"The impact on Australia immediately... will be very limited. It will take some years for UK to negotiate an exit (to leave the EU)."

Stock markets across the region have been falling, with Japan's Nikkai shedding 7.6 percent, and Australia's benchmark slumping 3.62 percent by 14:58 local time (AEST) as markets re-adjusted.

The Australian dollar too has slumped 4 percent since the Asian open to 73.27 U.S. cents, however Britain's Pound Sterling was savaged by 10.1 percent, an even larger all than the Global Financial Crisis(GFC).

"The surprise 'Leave' victory in the UK's Brexit referendum has changed the calculus of global markets," IG market analyst Angus Nicholson said in a note.

Further adding to weakness is the uncertainty over what comes next, and its impact on the economic recovery from the GFC that's still fragile in the many parts of the world.

"The biggest concern for markets is what the implication of Brexit will be for the European Union," Nicholson said.

"There is strong incentive for the EU to make the UK's exit as punitive as possible to severely diminish the risk of other members making the same move."

For Australia however, Turnbull said there is no cause for Australia to be alarmed by these developments.

"Our relations with the United Kingdom, which are as close as any two nations' relations could be, will continue as positively and intimately as ever... and our very strong relations with Europe, with continental Europe, which are leading towards negotiations to a Free Trade Agreement will also continue," Turnbull said.

"The Australian economy is strong and resilient and has weathered global shocks before, and weathered them well." Enditem