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Emerging markets the true victims of financial turmoil

Not all of them have both the reserves and the will to abandon a floating exchange rate.

BIS estimates dollar credit to non-bank borrowers outside the US at US$9 trillion. Big debtors include: China (US$1 trillion), Brazil (more than US$300 billion) and India (US$125 billion).


WITH the currencies of Malaysia, Indonesia, South Africa, Turkey, Brazil, Colombia, Chile and Mexico hitting record lows recently, currency traders around the world are asking: How much further can emerging-market currencies weaken?

The standard approach to answering this...

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