Interest rate hikes by Turkey and South Africa failed to stem falls in their currencies Wednesday and the US Federal Reserve piled more pressure on emerging markets by cutting stimulus spending.
Currencies in Russia, Brazil and Argentina also fell, despite the International Monetary Fund insisting there is no general crisis and that each emerging economy faces challenges specific to itself.
But the US central bank's decision to slice another $10 billion from its monthly stimulus, announced after most non-US markets had closed, could lead to more capital outflows for emerging markets.
The Fed said the US economy was growing firmly enough to further trim the stimulus, which will fall to $65 billion a month from February, spelling a steady tightening of global financial conditions.
The US central bank made no mention of the turmoil stretching from Indonesia to Argentina, turmoil that also has also taken a toll on developed economy stock markets over the past week.
"By omitting any acknowledgement of the recent selloff, the Fed is signaling that it sees little risk at this time of contagion from developing to developed markets," said Omer Esiner of Commonwealth Foreign Exchange.
"Investors had seen a small chance that the Fed could adopt a more cautious tone given the recent selloff in developing markets," he said.
Earlier Wednesday, faced with crumbling currencies, the central banks of India, Turkey and South Africa all hiked their key interest rates.
Turkey dramatically doubled its benchmark to 10.0 percent, while South Africa announced a rise of half a percentage point .
In India, the rise was a modest quarter-point, aiming to slow inflation, itself also partly a consequence of the rupee's slump.
The moves had momentary impact on the respective currencies, but by the end of the day they had only found brief relief.
The Turkish lira jumped about 3.0 percent overnight to 2.17 to the US dollar in response to the central bank's U-turn, but then shed half those gains, falling back to 2.25 per dollar.
In South Africa, the rand got little respite from the Reserve Bank's decision. It sank to a five year low of 11.38 to the dollar shortly after the rate hike announcement. And although it rebounded later to 11.20, that was still lower the pre-rate hike rate.
"With all these emerging market central banks raising interest rates, South Africa simply had to follow suit. But they went in half-hearted and the market seems to have called their bluff," said Fawad Razaqzada at Forex.com.
In Russia, the ruble tumbled to a record low against the euro and the lowest level against the dollar since 2009 after the Central Bank announced it had spent some $1.1 billion propping it up on Monday.
In Brazil, the real hit 2.44 per US dollar, its lowest since August.
And Argentina's peso also fell on the black market again despite the central bank's holding the official rate stable for a third day after last week's devaluation.
Share markets also sank further in most of the same countries.
Michael Hewson at CMC Markets UK said the rate hikes like Turkey's help address short term capital flow problems but do nothing for short and medium term growth prospects.
"It would appear that markets have belatedly cottoned on to this and equity markets have slowly slipped back from their early highs and slid sharply lower," he said.
"The fact that currencies have continued to weaken even in countries that have started to raise interest rates opens up a new, and potentially more worrying, phase of the recent turmoil... in which beleaguered policymakers find themselves unable to defend their currencies," said Neil Shearing at Capital Economics.
But late Tuesday the IMF argued the current emerging market problems do not stem from Fed policies, unlike early last year when the prospect of Fed tightening sent US interest rates rising quickly.
"This is not like May, this is not a panic situation," Jose Vinals, director of the IMF's Monetary and Capital Markets Department, insisted.
Vinals called the current turbulence "a combination of idiosyncratic factors."
"We don't see the commonality that existed in May, which was the US tapering. This is something where the US monetary policy tapering expectations have so far not played an important role," he said.
The jitters, he said, are signs that the emerging economies "have yet to complete their adjustment to more volatile external conditions and higher risk premiums."