Policymakers step in to defend currencies

Policymakers in Mexico and Colombia this month responded to the sharp falls in their currencies by hiking interest rates and stepping up intervention in foreign exchange markets. These moves appear to have succeeded in supporting their currencies over the past week or so. Meanwhile, Argentina has agreed a deal with some of its holdout creditors from the 2001/2 default, meaning that a return to global capital markets over the coming quarters is looking increasingly likely.