The U.S. dollar’s relentless climb higher is blowing a hole in the finances of developing nations.
Policymakers in these countries are, collectively, burning through the equivalent of more than $2 billion of foreign reserves every weekday in an attempt to prop up their currencies against the dollar. In total this year, they’ve drained reserves — the emergency stash they hold to fend off severe economic crises — by $379 billion.
In a sign, though, of just how powerful the forces are driving the dollar higher, and of how perilous the current moment is, these efforts have done little to stabilize foreign-exchange markets in the most vulnerable countries.