SÃO PAULO, Brazil—Emerging nations from Brazil to Taiwan are racing to erect protective berms around their economies as a torrent of capital pours in from rich countries such as the U.S., threatening to derail growth by sending currencies soaring, squeezing exporters and injecting volatility into local markets.

This week, Taiwan imposed limits on bond holdings by foreigners. In October, both Brazil and Thailand raised taxes on foreign investment in local bonds. In June, South Korea restricted derivatives trading, while Indonesia limited investors from selling some short-term bonds. Meantime, central banks from Israel to South Africa are buying dollars to keep their currencies from rising.

As currencies surge across emerging markets, officials are reaching for once-taboo policy prescriptions broadly defined as capital controls in a bid to head off asset bubbles and the other economic downsides of excessive capital flows. The moves, which often carry unwanted side effects, are the latest example of how economic imbalances between rich and developing economies in the wake of the global financial crisis are creating economic headaches for policy makers in the emerging world.

With economies in the U.S., Japan and Europe feeble and interest rates there very low, faster-growing nations like Brazil are attracting a frenzy of investment. Much of it is speculative "hot money" attracted by the higher yields in emerging markets and the prospect of rising currencies, relative to those of richer nations. The trend isn't likely to ease soon. Last week, the U.S. Federal Reserve said it will buy $600 billion of government bonds to stimulate the U.S. economy. Some of the stimulus will slosh to higher-yielding emerging markets.

"There is a tsunami of dollars that is difficult to contain," said Mauricio Cárdenas, a Latin America scholar at the Brookings Institution in Washington. "Countries are doing what they can."

The currency tension between the rich and developing worlds has touched off protests by emerging economy leaders, most prominently Brazil, seeking to push the issue into the center of debate at the Group of 20 summit in Seoul this week. With its won rising, South Korea is considering new capital controls, including taxes on capital flows and foreign bond holdings to add to limits on derivatives trades.

"It doesn't help things to be throwing dollars from a helicopter," Brazil's outspoken Finance Minister Guido Mantega said Nov. 4 about the U.S. Fed's bond buying program. "The only result it has is to devalue the dollar."

U.S. officials have defended the move on the grounds that the global economy will be better off if the U.S. economy recovers faster.

What's more, some economists say the true culprits are countries such as China that maintain artificially weak currencies as a matter of course. China raised reserve requirements at banks this week, also a move to slow foreign investment.

The patchwork of currency policies has sparked concern that global cooperation in the wake of the financial crisis has been replaced by economic self-interest.

"Urgent action is needed to arrest the disturbing trend towards unilateral moves on macroeconomic, trade and currency issues," Charles H. Dallara, managing director of the International Institute of Finance, an association of big international banks, said in a recent statement.

In normal times, rising investment and strong currencies are considered good things. And emerging-market countries still rely on foreign investment for growth.

But what's changed is the flow of speculative cash has reached levels that are bigger than the mostly smaller emerging economies can digest.

The Institute for International Finance estimates private capital flows to emerging economies will be $825 billion in 2010, compared with $581 billion last year.

—Tom Murphy in São Paulo
and Evan Ramstad in Seoul contributed to this article.