International markets have been in turmoil since US Federal Reserve Chairman Ben Bernanke said last month the Fed might begin reducing its $85 billion a month of bond and mortgage purchases within months, which triggered a massive sell-off of risk assets around the globe.
US dollar gained more value after the Fed decision and the US Central Bank had to supply dollar currency so that it traded at its expected level.
Fed's decision affected markets of developing countries most urging them to increase interest rates in order to prevent capital outflow and bring in more capital flow.
Indonesia’s Central Bank in order to cope with inflation raised the BI (policy rate) rate by 50 bps to 6.5 percent while Brazil having the largest economy of Latin America raised the BI rate by 50 bps to 8.5, targeting to increase the value of its currency.
However Turkey has less interest rates with a 4.5 percent BI rate.