JAKARTA - India's rupee crashed to a record low and the Indonesian rupiah hit a four-year trough yesterday, as the expected withdrawal of United States monetary stimulus prompts investors to shun emerging markets burdened by weak external balances, slowing economies and inflation.
They followed a slide on Friday in Brazil's real, a currency that - like the rupee - has been hammered by investor doubts that actions taken by local monetary authorities last week will prove effective in stemming the sell-off.
"Our primary concern is that the policy authorities still don't 'get it' - thinking this is a fairly minor squall which will simmer down relatively quickly with fairly minor actions," Mr Robert Prior-Wandesforde, an economist at Credit Suisse in Singapore, wrote in a note on the Indian currency.
Growing expectations that the US Federal Reserve will start scaling back its bond purchases as early as next month have weighed on many emerging markets.
