Prime Minister Mahathir Mohamad of Malaysia exhorted his compatriots to join together to stem the slide of the ringgit by refraining from seeking refuge in more stable foreign currencies. He said Malaysia risked being "recolonized" by foreign powers if it failed to act. "The fall in our currency's value has made us poorer, exposing us to the possibility of being controlled by foreign powers. If this happens, we will lose the freedom to run our country's economy and with it our political freedom also. In short, we will be recolonized indirectly," he said.

By imposing harsh terms on financial aid to troubled Asian nations, the United States was forcing into submission economic rivals in the region, the People's Daily newspaper said. "By giving help, [the U.S.] is forcing East Asia into submission, promoting the U.S. economic and political model, and easing East Asia's threat to the U.S. economy."

Currencies in Indonesia, Thailand, Malaysia and the Philippines have tumbled to record lows, bringing closer the specter of large-scale corporate defaults.

Analysts said that the downward spiral in currency values was undermining confidence in the ability of governments to restore stability.

"We have seen a major wave of foreign capital flight from Southeast Asia," said Simon Ogus, chief economist for Asia in the Hong Kong office of SBC Warburg Dillon Read. "Now we are seeing domestic capital flight. People just don't trust their policymakers in sorting this mess out."

Some bankers and economists said that if the downward currency spiral continued, Indonesia and Thailand--the region's two most heavily indebted nations--might be forced to declare a moratorium on repaying private-sector debts, which total more than $150 billion, to save many companies from going bust. Creditors can either agree to roll over their loans or face outright default.