The emerging market currencies rose for the fourth straight session on Tuesday as the dollar stayed steady ahead of an inflation test, while Turkey's lira did little to support the beleaguered currency.
The lira slipped by 1%, less than 1% from its all-time lows, compared to a 0.2% rise for the MSCI index of EM currencies.
The reserve requirement ratios for online deposits increased by 200 basis points according to Turkey's central bank. The bank tried to encourage holding the local currency, as it raises required reserves by $4.6 billion.
Markets were less impressed.
The market is looking through this as the market is looking through the credibility of the Turkish central bank, but the market is looking through this as the credibility of the Turkish central bank is not that strong, said Jakob Christensen, head of EM research at Danske Bank.
The currency went down because of increasing pressure by President Tayyip Erdogan in a surging inflation environment.
The dollar held steady as most other currencies firmed. The Federal Reserve said that consumer prices in the U.S. fell last month, which would raise speculation of a faster tightening, despite assurances of patience.
The attractiveness of high-yielding but risky EM currencies for foreign investors is reduced by higher rates in the U.S.
China factory gate prices are seen as going to rise in October as it is a result of pressures that rising inflation could slow down the economic recovery.
Russian rouble erased initial sluggishness as oil prices rose. The foreign currency purchases by its finance ministry were limited due to an increase in the volume of foreign currency purchases.
Most central and eastern European currencies gained against the euro, with Hungary's forint, the Czech crown and Poland's zloty rising around 0.2%.
Data on Tuesday showed Hungarian headline inflation significantly exceeded analyst forecasts, raising bets that the banks may adopt a more hawkish stance, like its regional counterparts.
Romania's central bank is going to increase its interest rate by 50 basis points later in the day. Last week, the Czech National Bank went up by 125 basis points, while Poland went up by 75 bps.
The Romanian leu was flat ahead of the decision.
Carnage in China's property sector kept a check on sentiment as the stocks were added 0.4%, but they added 0.4%.
Indebted and downgraded Kaisa Group said it needs help to pay investors, workers and suppliers. The troubles of China Evergrande Group are caused by a liquidity squeeze in China's real estate sector.