Like many other emerging economies, Argentina also took steps to counter its currency slump by raising its interest rate for the fourth time this year from 40% to 45%. The moves come as a surprise and in response to the panic which is widespread all around the globe in relation to weakening emerging market currencies, unresolved trade tensions and the strengthening of U.S. dollar (read: Dollar on a Bull Ride:ETFs to Buy/Avoid). Cutting subsidies has increased utility bills and fueled inflation by 29.5% in the year through June. Argentina is not the only emerging market economy that is vulnerable right now, the circumstances are gloomy in the emerging market sector holistically. It has a history of hyperinflation, bank deposit confiscation, which has reduced the importance of the currency. Notably, Argentine peso hit an all-time low, tumbling 38% this year on corruption scandal and Turkey crisis. The country is in a tight grip as the graft scandal which broke this month has landed the former top government officials and construction company executives in jail and increased the uncertainty surrounding the country’s investment avenues. Turkey crisis pushed the peso further down, worsening the emerging market rout. Round Up On Rate Hike News Anywhere in the world, 45% is the highest interest rate offered. This level is being planned to be held at least till October. The Central Bank announced that it will sell $500 million to support the peso. Lesser short-term debts will be issued. This measure has been applauded by the IMF which said this should remove an important source of vulnerability. In 2001, when the institution failed to rescue the country, Argentina went into a sovereign debt default. The government has also cut its full-year 2018 economic growth forecast to zero from 0.5%. Impact on ETFs Global X MSCI Argentina ETF ARGT and ishares MSCI Argentina and Global Exposure ETF AGT are closing in toward their 52-week low (read: ETFs That are Hardly Hit by the Turkey Turmoil) ARGT It tracks the MSCI All Argentina 25/50 Index. This fund invests in the largest and most-liquid securities with exposure to Argentina. There are 28 holdings in the basket with MERCADOLIBRE INCMELI occupying the top weight with 28.12%, the next best being TENARIS SATS with 15.73%.The fund has recorded losses of 8.76% in the last one month. It has AUM of $120.3 million and an expense ratio of 59 bps. It has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook (read:Guide to the 25 Cheapest ETFs). AGT It also tracks the MSCI All Argentina 25/50 Index abd provides broad access to stocks with exposure to Argentina. There are 28 holdings in the fund pool with MELI and TS having the top weights with 29.04% and 15.47%, respectively. The fund has recorded losses of 9.09% in the past one month. Its AUM is $25.9 million and expense ratio is 59 bps. It has a Zacks ETF Rank #3 (Hold). Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MercadoLibre, Inc. (MELI): Free Stock Analysis Report GLBL-X MS ARGEN (ARGT): ETF Research Reports Tenaris S.A. (TS): Free Stock Analysis Report ISHRS-MSCI ARG (AGT): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report