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Economy

Indonesia and Brazil fall off easing track as capital bleeds out

Central bankers frantic to avoid Argentine-style currency depreciation

Indonesia is facing a rapid capital drain.

NEW YORK/MIAMI, U.S. -- Rising U.S. interest rates have started drawing investment capital out of emerging markets like Indonesia and Brazil, sending monetary authorities on the defensive against runaway currency depreciation.

Indonesia's central bank moved Thursday to raise its policy rate to 4.5% from 4.25%. A day earlier, Brazil's central bank announced it would hold interest rates steady after cutting them at every one of its previous 12 policy meetings, saying that "normalization of interest rates in some advanced economies led to adjustments in international financial markets."

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