Currency War of 2009–11

International Monetary Fund (IMF) chief Kristalina Georgieva said yesterday that risks to financial stability have increased and called for continued vigilance although actions by advanced economies have calmed market stress.

US Deputy Prime Minister and Head of Chinese Delegation for Trade and Economic Negotiations with US, Liu He met in Washington yesterday with the Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva.

China's economy already is slowing amid the trade conflict with the United States, but if Washington were to ramp up tariffs even further it could cut Chinese growth sharply, the International Monetary Fund (IMF) has warned.

Seven emerging economies are at risk of a crisis in the exchange rate. They are Sri Lanka, South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine, experts from Nomura Holdings, quoted by Bloomberg, said in an interview.

Emerging currencies, including the Turkish Lira, and global stock markets were down on June 19 as the tit-for-tat trade war between the United States and China escalated.

The Turkish currency tumbled 1.5 percent to yet another record low against the dollar on May 4 amid nagging worries over rising inflation, while the U.S. currency continued to make broad gains.

Sharp swings in global financial markets in the past few days are not worrying since economic growth is strong but reforms are still needed to avert future crises, the managing director of the International Monetary Fund said on Feb. 11.

European Union finance ministers admitted on April 8 that the world's 20 biggest economies (G-20) will miss their target of generating additional economic growth through reforms by 2018 and called for reflection on why they have failed.

The long-waited rate hike decision by the United States Federal Reserve (Fed) will most probably be made by the next month. The global markets have definitely prepared themselves adequately for the hike. They have prepared so much that many emerging currencies, including the Turkish Lira, has started to gain value against the U.S.

Within the framework of the U.S. Federal Reserve's (the Fed) normalization process, the uncertainty on when the first rate hike will happen is continuing, thus allowing several local currencies, including the Turkish Lira, to catch their breaths and take a break in their losses during the month of October.