Trading in Brazil, Source: REUTERS
Emerging market currencies extended their slide against the dollar on Thursday, shrugging off central bank attempts to shore them up and raising pressure on more countries to step in to halt capital flows.
Fears about emerging economies intensified after the Federal Reserve withdrew more of its monetary stimulus on Wednesday and after Chinese manufacturing was seen in a survey slipping to a six-month low.
The Turkish lira fell more than 1 percent to 2.2810 per dollar, approaching record lows set earlier this week and fully erasing gains made after the central bank surprised the market with a whopping 425 basis point rate hike
Local stocks lost 1.3 percent. The lira's one-month implied volatility shot above 20 percent on Wednesday, its highest in nearly 5 years.
The South African rand also ignored a surprise 50 basis point interest rate hike from the central bank on Wednesday, hitting a fresh five-year low of 11.38 per dollar while the yield on benchmark government bonds jumped 36 bps to 7.36 percent.
"The concern here comes with the fact that we've had major emerging central banks resort to tighter policy rates to defend their currencies, but have failed fairly miserably," said Abbas Ameli-Renani, emerging market strategist at RBS.
The Russian rouble hit a record low of 48.21 per euro and also fell to the lowest level since March 2009 against the dollar.
The five-year Russian government bond yield hit a 16-month high, with the yield rising 70 basis points this week alone.
The Hungarian forint fell 1 percent to a fresh two-year low of 312.65 per euro.