Asian central banks embarked on a day of intervention in foreign exchange markets yesterday as inflation, social unrest and plunging stock markets weighed heavily on currencies.

Dealing floors in Tokyo, Hong Kong and London said that there had been noticeable intervention efforts by authorities in Malaysia, Indonesia, the Philippines and India - each selling dollars in favour of local currencies. Although the moves were near-simultaneous, analysts said that they were unlikely to have been part of a concerted scheme.

Derek Halpenny, senior currency economist for the Bank of Tokyo Mitsubishi UFJ, said that it was “hardly surprising, given what has happened in the last 48 hours” that so many central banks in the region might have decided to intervene now. He added that several central banks in the region - notably in Indonesia and Malaysia - had made little secret of plans to control their currencies more tightly as oil and food-related price rises raised the burden of imported inflation and as currency weakness aggravated the situation.

The moves across Asia coincided with the declaration of a state of emergency in Bangkok after violent anti-government protests overnight led to public order being handed to the Thai military.

Emerging market analysts in Singapore gave warning of a possible flight of foreign capital from a basket of Thai baht-based assets if violence worsened and the political crisis deepened.

The turmoil in Thailand is another big blow to emerging-market investors. Merrill Lynch's monthly Fund Managers Survey in August showed that Thailand was institutional investors' second-favourite emerging market, after Russia, where sentiment has wilted since its invasion of Georgia.

As the political violence in Thailand plays itself out, the baht could remain under heavy pressure. The Thai central bank acknowledged that it had sold dollars to draw a line under the baht, which nevertheless dived to a year low.

Foreign investors have become cautious in assessing risk in other South-East Asian markets. In Malaysia, opposition parties rallied behind Anwar Ibrahim, the politician who has boasted that he will, within the next two weeks, overturn the Barisan Nasional coalition that has ruled the country for 50 years.

In South Korea, where shares have taken a heavy beating and the won has fallen to a four-year low, the central bank engaged in “verbal intervention” yesterday in an effort to persuade investors to lighten the selling pressure on the beleaguered currency.

South Korea's new light touch in actual currency interventions has triggered speculation that the authorities are prepared to let the won slide so that the attractiveness of Korea's exports - critical to the economy - is enhanced.

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive