Emerging market currencies slumped even after Turkey, South Africa raised interest rates

Emerging market currencies slumped on Wednesday even after Turkey and South Africa aggressively raised interest rates to stop capital flight, as investors braced for the U.S. Federal Reserve to further scale back its bond-buying program, Reuters reported.Stock and foreign exchange markets from Istanbul to Sao Paulo remained under stress, with the Turkish lira staging a short-lived rally that set the tone for other emerging market currencies.Turkey's massive monetary tightening put pressure on the most fragile developing countries to follow suit to prevent jittery investors from running for the exits. But not even higher returns were enough to stop the exodus as the Fed looked set to further mop up the easy money that had been flooding emerging markets over the past several years.The South African rand was down 1.6 percent to 11.15 per dollar even after the country's central bank raised interest rates for the first time in almost six years, bringing its benchmark rate to 5.5 percent from 5.0 percent.In Turkey, where the central bank raised all of its interest rates in dramatic fashion, the lira initially rallied more than 3 percent but eventually gave up gains before recovering slightly. It last traded 0.6 percent stronger at 2.24 per dollar.Latin American currencies resumed a broad sell-off, with the Argentine peso sliding 1.6 percent on the black market to 12.75 per dollar and the Mexican peso dropping 0.6 percent after two straight sessions of gains.The Brazilian real dropped 0.3 percent as investors worried about the impact of the recent emerging market turmoil on Brazil's already shrinking economic growth prospects.