play out is how policy makers respond to adverse capital flows: whether they let their currency go and allow a tightening of financial conditions to flow through (painful but typically necessary to resolve the crisis), or print money to make up for money leaving (which can be inflationary). In this case, they abandoned the currency peg and, after a slightly longer than average “ugly” phase, policy makers allowed enough tightening to flow through to reduce spending on imports (the current account balance improved by 3% of GDP), and make the currency more attractive to hold.
