Emerging Market Central Bankers Are Getting Nervous About Their Plunging Currencies

The biggest decline in emerging-market currencies since the global financial crisis is quickly turning from a welcome event for countries seeking to make their economies more competitive into something destructive.
The selloff has become so swift and so deep that officials are abandoning hands-off policies on concern the drop will fuel inflation, deter investment from foreigners and act as a drag on their economies at a time when global growth is already decelerating. To counter the declines, policy makers from Mexico to South Africa and Turkey have either stepped up intervention, increased interest rates or signaled an end to monetary easing.
Wall Street firms aren’t optimistic. Morgan Stanley says more policy makers will be forced to act, and Goldman Sachs Group Inc. warns there’s no end in sight to the weakness in developing-nation currencies.
Here’s the damage report:

This post was published at David Stockmans Contra Corner on August 1, 2015.