Global events determine global exchange rates. That’s why every week at theCurrent we bring you the world’s biggest business stories. This week: Rio is broke, India’s central bank governor quits, the NHL gambles on Vegas, and Canadian banks hike rates (suprise, suprise).
Rio Owes
Rio de Janeiro’s Interim Governor Francisco Dornelles declared a state of emergency, just 50 days prior to the Olympic opening ceremony due to a “serious economic crisis.” Brazil is in the midst of a deep recession and Rio government employees are owed wages and previous payments. Although the mayor of Rio, Eduardo Paes has insisted that the games will not be disrupted, the state of Rio owes US$5.5 billion. Of greater concern to many is the risk of Zika virus spreading to athletes and visitors. Half a million people are expected to visit Rio for the Olympics.
Raghuram Rajan Resigns
India’s central bank governor will step down in early September when his current three year term comes to an end. Raghuram Rajan was previously an economist with the IMF where he was one of the few notable global economists to predict the 2008 financial crisis. Rajan has faced political pressure from Prime Minister Modi’s party for keeping interest rates high. Speculation of whether he was pushed to quit is strong, and could hit India’s economy hard. Rajan’s international credibility has helped draw global investment to India.
NHL Gambles on Vegas
Reports indicate that the NHL will overlook Quebec and award a hockey team instead to Las Vegas. Sin City currently doesn’t have a professional sports team. Many people have been critical of the NHL for expanding into non-traditional hockey markets. On June 22 the NHL’s board will announce their official decision.
Brexit
On June 23rd the UK will vote in a referendum on the country’s EU membership. Recent polling has indicated that results could go right down to the wire with the country almost evenly split. Regardless of the outcome, expect big movements in the foreign exchange rates – especially the EUR and GBP. For more information on the UK’s EU referendum check out our guide.
Canadian banks hike fees
A report by the CBC revealed the price gouging and massive profits by Canada’s major banks. On March 1st TD hiked fees on non-TD ATM usage (from $0.50 to $2.00) and added a $75 fee for transferring a tax free account from TD to another bank. Last month the bank also announced Q2 profits of $2.05 billion. CIBC raised the minimum amount needed to avoid fees for its ‘Everyday Chequing Account’ by $1,000 to $2,000, despite Q2 profits of $941 million.
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