LONDON, Aug 25 — Central bankers across emerging markets are being forced into action to stem falls in their currencies, especially afterChina allowed its yuan to weaken to four-year lows.

A JPMorgan index tracking 22 emerging market currencies has hit successive record lows and losses have spiralled this week, forcing currencies to fresh multi-year and record lows,

Until recently, policymakers in the developing world, facing sluggish growth and shrinking exports, were relatively sanguine about currency weakness. Now however most are desperate to prevent volatile swings or excessive declines that could exacerbate capital flight and inflation.

The following is a list of measures emerging central banks are taking or debating in order to limit currency weakness:

SOUTH KOREA

Seoul has intervened on and off to steady the won and is believed to have sold dollars on Aug 24 as the won fell to 3-1/2 year lows. Finance Minister Choi Kyung-hwan said on Aug 20 that he was looking into possible responses should risks from the yuan devaluation increase.

INDONESIA

Jakarta has changed auction mechanisms of several monetary instruments and offered longer tenors to absorb banks’ short-term liquidity and support the rupiah. It kept interest rates steady on Aug. 19 despite growth at six-year lows, citing the need for currency stability. The central bank said it had been “desperately defending” the rupiah, which has plumbed 17-year lows versus the dollar.

MALAYSIA

Reserves have fallen to US$94.5 billion (RM402.05 billion) to near a six-year low after repeated central bank interventions, data showed on Aug. 21. The currency is at its lowest since before the government put a “floor” under it during the 1998 crisis. But Prime Minister Datuk Seri Najib Razak has pledged not to peg the ringgit or implement capital controls.

PERU

Peru has tightened reserve requirements on currency derivatives after the sol hit its weakest level in nine years against the dollar. It has regularly sold dollars, selling US$219 million on Aug 20, its biggest intervention since April.

TURKEY

Turkey said on Aug 18 it may raise the amount sold at daily foreign exchange auctions by as much as US$70 million above the pre-announced minimum, after previously pledging to add US$30 million. Governor Erdem Basci has also signalled a return to more orthodox monetary policy, saying the bank was assessing the effect of using a single interest rate.

MEXICO

Mexico has raised daily dollar auctions to US$200 million from US$52 million. It offers US$200 million when the peso slumps more than 1 per cent from the previous day’s fix rate and another US$200 million every day without a minimum price trigger. Governor Agustin Carstens said on Aug 19 he would do everything possible to ensure the peso, at record lows versus the dollar, does not fuel faster inflation..

NIGERIA

Nigeria has been selling dollars twice weekly to bureaux de change, helping to raise the naira to 210 per dollar on the parallel market from record lows. It has also directed banks to pay for dollar purchases 48 hours in advance and curbed access to the interbank market to preserve foreign reserves.

UGANDA

Uganda raised rates by 150 basis points to 16 per cent on Aug. 10, saying shilling depreciation posed inflation risks . Rates have been hiked by 500 bps since April.

KENYA

Kenya has been mopping up shillings from money markets, making it expensive to hold dollars. It has raised interest rates by a total of 300 basis points since June but defied expectations of a 50-bps hike this month.

BRAZIL

Brazil has stepped up the pace of rolling over currency swaps put in place to support the real, currently at 12-year lows and by end-August it is expected to have rolled over all swaps that expire on Sept. 1. A source said the government would consider selling dollars through repurchase agreements if necessary before dipping into its US$371 billion in foreign reserves.

RUSSIA

Economy Minister Alexei Ulyukayev said the central bank could pause cutting interest rates at its next monetary policy meeting. The bank has stopped dollar purchases to reduce pressure on the rouble which is near seven-month lows.

SOUTH AFRICA

Johannesburg will consider intervening in foreign exchange markets to ensure “orderly market conditions”, the central bank said after the rand plumbed record lows

SERBIA

Siberia intervened on Aug 24 to stem dinar losses, selling euros for the first time since April.  — Reuters