NEW YORK ( TheStreet) -- The "softer" monetary policy adopted by Western economies has created a liquidity deluge in emerging markets like Brazil and China. The central banks in these countries have moved in to purge excess liquidity, in a bid to prevent currency appreciation and formation of asset bubbles.People's Bank of China has hiked reserve requirement rates for the third time in the last two months, and policy makers in Brazil have increased the reserve and capital requirements to flush out excess liquidity. The government of India has increased policy rates to hedge inflation fears, although the measures seem a little sanguine in recent weeks.
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