Tuesday 11 February 2014 3:29 am

Kazakhstan’s tenge is the latest emerging market domino to fall. Here’s what you need to know

Crunch time for another emerging market economy.

The fall of Kazakhstan's tenge is the latest in a series of currency depreciations to hit emerging markets over the last few weeks.

Kazakhstan's central bank governor Kairat Kelimbetov has pledged to "protect the tenge from sharp moves … away from the new level of 185 to the dollar."

That statement came shortly after the central bank devalued the currency by 19 per cent from Monday's level of around 156 to the dollar. The move is intended to increase the competitiveness of Kazkahstan's ailing economy.

Recent weeks have seen tightening from central banks across Ghana, India, Turkey, and South Africa. Argentina has been forced to devalue its peso, while Ukraine has seen instability force its hand in a decision to impose capital controls.

Some have pointed to the need for sudden and rapid tightening as a consequence of economies keeping monetary policy too loose for too long. Now that expectations of Federal Reserve liquidity are falling, those positions are being exposed.

Kazakhstan's central bank said that "as a result of the reductions in quantitative easing in the US, capital is flowing from developing markets into developed markets, which has led to pressure on currencies."

But in some ways talk of crisis has been overdone. Here's one chart that puts the discussion in perspective.