This is a different problem from that of the more developed world, where money is jammed up within the system rather than jumping continents. Both, however, bring a cost. Capital flight and central bank intervention has depleted foreign exchange reserves in Asia, excluding Japan and China, by $42bn over the past three months, according to Royal Bank of Scotland. Korea, which has stepped in repeatedly to shore up the won, has spent an estimated $40bn over the past two months in the spot and forward FX markets. That may not be huge in the context of its $240bn of foreign exchange reserves, but whittling back the dollar kitty escalates concerns about Korea's $175bn of short-term liabilities. Rationally, these fears are probably overdone – a fair bit of those liabilities represent trades by onshore foreign banks, and are hedged – but rational behaviour has long since been abandoned.
Further weakness is on the cards. Asian economies are slowing and few have the firepower to spend their way out of trouble: India's consolidated fiscal deficit could hit 9 per cent of GDP this year. There is also more deleveraging to come; in the case of Korea, from small and medium-sized enterprises and consumers. Weak currencies and still-present inflation notwithstanding, the odds of interest rate cuts are rising in both countries.