Emerging Markets' Glitter Fades In The Face Of Turmoil

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LONDON--Foreign exchange controls imposed on the Malaysian ringgit last Tuesday, September 1, have sparked fears that the shine may have left the emerging currencies market, according to industry sources.

Many major international banks have taken sizeable hits in recent weeks, and are scaling back counterparty credit limits and rethinking strategy to deal in the volatile conditions.

"All the major players had a decent amount of exposure to these markets," says David Gilmore, a partner at FX A

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