States Play Currency Defense

From the Wall Street Journal:

As once-robust currencies tumble, governments are stepping in to defend them in their largest moves in years.

Last week, the central banks of Russia and South Korea again charged into the markets to shore up their currencies by selling billions of dollars from their stockpiles of reserves.

Other governments in developing countries, including Thailand, India and Pakistan, have also intervened to bolster their currencies in recent months.

The sums involved are large. Russia spent about $14 billion in August alone, the largest such drawdown in its reserves in at least a decade, as foreign investors fled following the conflict with Georgia. South Korea has spent more than $21 billion -- or roughly 8% -- of its reserves in the past five months to assist the ailing won....MORE