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• On May 8 Argentina’s President Mauricio Macri said the country had asked the International Monetary Fund (IMF) for financing to help stem a five-month rout in the peso that led to a surge in interest rates and threatened to derail the economic recovery. The speech was the first time Macri spoke to the nation after the central bank raised the benchmark interest rate three times in ten days to 40 percent – the highest among major economies. The IMF previously lent to Argentina before the country defaulted on its debts in 2001. The Argentinian peso depreciated 2.4 percent versus the US dollar on the day.
• On May 23 Turkey’s lira fell as much as 5.5 percent against the US dollar after President Erdogan, who has made clear his preference for low interest rates, threatened central bank independence after the June election. His threat was enough to spook Japanese investors, who started selling the lira en masse. In response, Erdogan ordered Turkey’s main bourse to sell hard currency to defend the lira. Meanwhile, currency traders worried Erdogan would make a bad situation worse by next ordering capital controls. At an emergency policy meeting the central bank lifted the benchmark rate by 300 basis points to 16.5 percent in a bid to stem an outflow of capital from the country, control inflation, and support the lira.
• On June 5 Brazil’s central bank stepped up efforts to support the Brazilian real as the currency tumbled to the weakest level against the US dollar since former President Dilma Rousseff’s tumultuous impeachment in 2016. The central bank’s intervention in the currency market followed several weeks of real depreciation as investors had grown concerned that the country’s October elections could usher in a less business friendly new president. Despite the central bank’s efforts, the real tumbled 1.7 percent against the US dollar on the day.
• On June 6 economic data showed that Japanese household spending disappointed for a third month as consumers were unwilling to open their wallets amid a lack of a pick-up in real incomes. The yen depreciated to ¥110.18 against the US dollar on the day.
• On June 15 US and China tariff tensions sparked fears of an intensifying trade war which weighed on global risk appetite and resource-dependent currencies. The Canadian dollar depreciated 0.76 percent to the lowest level in almost a year against the US dollar amid the escalating trade tensions, soft Canadian economic data, and a broad decline in commodity prices.