SINGAPORE (Apr 30): To fight the coronavirus, developing economies from Colombia to Indonesia are turning to a playbook that’s become familiar in the rich world since 2008: central banks are buying government debt.

Since February, some 13 emerging-market central banks have started snapping up bonds or said they are considering doing so, according to research from Bloomberg Intelligence. It’s a policy that carries a whole extra layer of risk in countries where currencies are fragile and capital has a history of fleeing.

While the central banks are trying to stabilise turbulent financial markets, their actions are also providing support for bigger fiscal deficits, with public spending everywhere getting ramped up to shield people and businesses from the pandemic’s fallout. Some, like Bank Indonesia, are buying sovereign debt directly — taking a step further even than most developed-economy peers.

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