Emerging markets are freaking out about the global flight from risk

Emerging market economies are scurrying to shield themselves from a sell-off in global markets. With their currencies weakening against the dollar as money floods into safe havens, their central banks are taking action.

• Indonesia‘s central bank unexpectedly raised interest rates today from 5.75% to 6% (paywall). The bank hopes it will help prepare the country’s economy for outflows of foreign cash. It also said it’s ready to buy government bonds to push up the weakening rupiah.
• India‘s central bank has sold US dollars in the last few days, Bloomberg reports, in an attempt to prevent the rupee from weakening.
• Thailand has is also selling dollars as the baht weakens. The country’s stock market has plunged in the last few days.
• Brazil finally scrapped the tariffs on foreign investment it adopted in 2010 to prevent its economy from overheating. Attracting foreign money isn’t as easy as it used to be.