Sharp interest rate hikes by Turkey and South Africa failed Wednesday to stem the falls in their currencies as emerging market economies around the world continued to battle capital outflows.
Russia, Brazil and Argentina also faced further drops in their currencies even as the International Monetary Fund stressed there was not a general panic and that each faces specific challenges.
Eyes were on the Federal Reserve's policy meeting to see if the US central bank would further cut its stimulus, which could send dollar interest rates high and accelerate the emerging market selloff.
"This is not like May, this is not a panic situation," Jose Vinals, director of the IMF's Monetary and Capital Markets Department, insisted on Tuesday.
Nevertheless, faced with crumbling currencies, the central banks of India, Turkey and South Africa all hiked their key interest rates early Wednesday.
Turkey dramatically doubled its key rate to 10.0 percent, while South Africa announced a shock rise of half a percentage point to borrowing costs.
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 only found brief relief.
The Turkish lira jumped, but then shed half its gains. It leapt by about 3.0 percent overnight to 2.17 to the US dollar in response to the central bank's U-turn, but later fell back to 2.25.
In South Africa, the rand got little respite from the Reserve Bank's decision.
The rand hit a new five year low of 11.3803 to the dollar shortly after the rate hike announcement, although it rebounded in later trade to 11.20, still lower than prior to the rate hike.
"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 48 rubles to the euro. In Brazil, the real hit 2.45 per US dollar, it's worst level since August and close to the lows of 2008 and 2009.
And Argentina's peso also slipped again despite the central bank's effort to stem its fall by loosening exchange controls.
Numerous analysts pointed to the expected second cut in as many months to the US Fed's quantitative easing program, an effective tightening of the easy-money program.
When the Fed first mooted the taper of the $85 billion a month program early last year, US interest rates jumped and capital flowed out of emerging economies.
The Fed finally cut $10 billion beginning this month, and most economists expect it to announce another $10 billion cut on Wednesday.
"Anticipation of another round of tapering had caused chaos and turmoil in emerging market," said currency dealer Amir Khan at London-based Currencies Direct.
But the IMF says the current problems facing emerging markets are not tied to Fed policy.
Vinals called the turbulence "a combination of idiosyncratic factors."
"We don't see the commonality that existed in May, which wasthe US tapering. This is something where the US monetary policy tapering expectations have so far not played an important role," he said.
The jitters are signs that the emerging economies "have yet to complete their adjustment to more volatile external conditions and higher risk premiums," he said
Neil MacKinnon, economist at Russian financial group VTB Capital said the Fed "might take the view that the problems afflicting the emerging economies are 'home grown' in the sense that it is those economies with high current account deficits and thin levels of foreign exchange reserves, like Turkey and South Africa' that have been the subject of the financial markets' focus."