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Turkey's turn: Rate hike calms markets

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The Fed & emerging markets

Turkey's central bank's call to action helped stabilize emerging markets, while India's rate hike overnight added a much needed boost to confidence.

The lira and rupee were both higher, and emerging markets were steadier across the board Tuesday, as Turkey's central bank was set to release a statement at 5 p.m. EST.

Update: The Turkey central bank hiked its rates significantly at the extraordinary meeting to defend the lira.

The central bank activity came as Federal Reserve officials gathered for a two-day meeting in Washington, where they were expected to cut back on some of the stimulus that had been sending investors into emerging markets. Fed watchers expect another cutback of $10 billion from the Fed's now $75-billion-a-month bond-buying program.

(Read more: What's going on in Turkey and why you should care)

This tapering of Fed stimulus has sent U.S. interest rates higher and kicked off a readjustment in global markets. The process has put the spotlight on developing countries with high debt burdens and weak currencies.