“Back then, investors reacted by panicking, withdrawing funds en masse, resulting in the Thai baht eventually collapsing. The phenomenon then spread like a wildfire throughout Asia, and even to Russia, with foreign capital vanishing almost with the blink of an eye. Short of capital, emerging countries suffered acute shortages of credit, plunging them even deeper into the crisis. Fifteen years on, India’s Prime Minister Manmohan Singh last week said emerging countries are now much better equipped. The Economist’s Ryan Avent wrote on his blog that a bigger concern are potential policy errors on behalf of governments and central banks as they try to stem the slide of their currencies.”

http://news.yahoo.com/emerging-market-turmoil-not-another-currency-crisis-064543689.html

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