Emerging Economies facing the heat now

A couple of policy initiatives suggest things have  turned tense at emerging economies as well. First 4 emerging economies central banks – S.Korea, Brazil, Mexico and Singapore set up a swap facility with Fed. The facility is for USD 30 billion each and is applicable till 30 April 2009. So after 10 developed economies (with NZ as the latest), emerging economies have set up swap facilities as well (though Both Korea and S’Pore are not strictly emerging).

Second, IMF has set up Short term liquidity facility for emerging economies with strong economic policies that are facing temporary liquidity problems in the global capital markets. Transcript of press conference to launch this facility is here.  Simon Johnson points the amount is not liely to be enough. Rodrik also shares similar views.