Emerging market economies are increasingly suffering from the looming end of US stimulus measures.
Countries like India, Indonesia, Turkey Thailand, Brazil and Malaysia are vulnerable.
Investors are moving their money from those places to the United States as the return on US government bonds edges up in anticipation of stimulus being wound down.
That has put pressure on share prices and local currencies.
Both India and Indonesia’s main stock markets have plunged 12 percent in the last three weeks as investors have started to head back to advanced economies like the US and Europe where growth and returns are picking up.
Even before the latest turmoil, between the end of April and the end of July Indonesia saw 13.6 percent of its reserves disappear. Turkey shed 12.7 percent and India 5.5 percent.
According to calculations by Morgan Stanley, central banks in the developing world have lost a total of 81 billion dollars (60 billion euros) in that period.
Things are likely to have got worse in August as the central banks stepped up their selling of foreign currency reserves to try to support their local currencies.
Next they will have to raise interest rates which risks choking off economic growth.
Many of those countries have been relying on low interest rates and massive borrowing to keep their economies expanding.
On Thursday the Indian rupee and Turkish lira skidded to new record lows against the dollar and the Indonesian rupiah slumped to fresh four-year lows.
In addition currencies such as the Mexican peso and the Korean won, that have so far been spared the worst of the recent selloff, are also now under pressure.