Photo Gallery Asian Countries Hit by Currency Crisis
A tourist exits a money exchange shop in Bangkok Thailand. The value of the currencies of several developing nations has dropped dramatically recently. Indonesia, Malaysia and Thailand are now not only exporting less to China, they are also forced to stand by and watch as investors flee en masse from the Indonesian rupiah, the Malaysian ringgit and the Thai baht.
Indians walk past a currency exchange shop in New Delhi, India. Since May, the rupee has lost 17 percent of its value against the dollar.
Investors have lost faith in India's economic miracle and in Indian politicians. Growth has dropped by nearly half, the country's trade balance continues to slip further into the red, stock prices are practically in free-fall and inflation is deepening the divide between rich and poor.
Financial experts have doubts about the Indonesian government's ability to combat the crisis effectively. "We do not think there is a magic bullet that can turn things around, stated a team of Barclays analysts headed by Prakriti Sofat.
Prasarn Trairatvorakul, head of Thailand's central bank, has tried in vain to calm the markets. The general economic situation is "still okay," he declared, adding that the baht was moving in line with economic fundamentals.
Indonesia's foreign currency reserves have shrunk by 18 percent since the beginning of the year. Until recently, the world's largest Muslim country was a favorite for foreign investors. Here, a worker cooks soybeans a tofu factory in Jakarta.
A schoolgirl walks past a construction site for luxury apartments in Jakarta. Companies from Europe, the US and Japan have built car and electronics factories in the country because, in addition to other factors, they also have faith in Indonesia's astonishingly well-functioning democracy. At the same time, nearly half of Indonesia's almost 240 million inhabitants live on less than $2 a day.
These developing countries are in a tight spot. To curtail rapid capital flight, they would need to raise interest rates considerably, but doing so would cause the country's economy to stall. Here, a Thai woman carries boxes on a shopping street in Bangkok.
