On Tuesday, the Indian rupee fell to a record low against the dollar, while the Indonesian rupiah dropped to its lowest level against the dollar since 2009.
In an effort to slow the exodus of foreign money from Turkey, the country’s central bank raised a key interest rate on Tuesday. That came as the Reserve Bank of India announced that it would start buying Indian government bonds later this week to 'address the risks to macroeconomic stability.'
Many of these nations fueled their economic growth with an unprecedented flow of money from foreign investors. Those investors, in turn, were encouraged by the low-interest-rate policies of the Fed, which made it easy to borrow money and send it abroad.
Last year, $1.2tr poured into emerging economies from around the world, nearly six times the amount going in just a decade ago, according to a report out Tuesday from HSBC.
Many economists say they believe that the problems are unlikely to significantly improve before the national elections bring in a new government next year.
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