EM policymakers step back from foreign exchange intervention

One of the more surprising features of August’s EM currency sell-off is how little policymakers in the worst-affected countries intervened in foreign exchange markets to try to stop it. In the case of Turkey, that probably reflects concerns that reserve levels were already worryingly low. But most other EMs have plenty of reserves. Their decision not to intervene instead underlines the point that policymakers are no longer so rattled by currency depreciation.