Just what will stop the emerging market carnage?

Democratic Youth Federation of India activists hold placards as they shout slogans during their protest over the rupee's fall in Hyderabad on August 23.
Noah Seelam | AFP | Getty Images
Democratic Youth Federation of India activists hold placards as they shout slogans during their protest over the rupee's fall in Hyderabad on August 23.

As the carnage in emerging markets continues, policy makers may have no option but to resort to more aggressive measures to shore-up confidence in their battered currencies, analysts say.

They add that the options available include stepping up the pace of interest rate hikes, while talk of capital controls to stem the outflow of foreign cash is also growing.

(Read more: Poll: Has the emerging market rout gone too far?)

Brazilon Wednesday lifted its key interest rate to a 16-month high of 9 percent in a bid to rebuild confidence in one of South America's largest economies, while Indonesia, Southeast Asia's biggest economy, is expected to follow suit when its central bank holds an emergency meeting on Thursday.

Brazil and Indonesia, alongside India, Turkey and South Africa, have been the hardest hit countries in a brutal sell off in emerging markets, triggered by expectations for an unwinding of the U.S. monetary stimulus that has provided global markets with ample liquidity in recent years.

Analysts told CNBC that capital controls, seen as a last resort when a country runs out monetary policy options to stabilize its economy and confidence in a crisis, is one option that may be considered by pummeled emerging markets.

"We've seen this movie many times with Thailand, the Philippines, South Korea, where you have massive capital flight, and they've had to resort to capital controls in order to control them," Boris Schlossberg, managing director at BK Asset Management in New York, told CNBC Asia's "Squawk Box."

"The one thing that is different right now is most of those emerging market nations have very good currency reserves so they're in much better fiscal shape than they were before, but it's a situation that is getting more perilous by the moment," he added.

(Read more: Stephen Roach warns of global economic crisis)

On Wednesday, India's beleaguered rupee slumped more than 3 percent to a fresh record low and the Indonesian rupiah weakened to 10,950 – its lowest level against the dollar in more than four years.

Capital controls?

Speaking to CNBC on Thursday, Indonesian Finance Minister Chatib Basri said the country was not contemplating capital controls.

(Watch this: Deficit is Indonesia's top priority: Fin Min)

"No, not at all. I was in the 2008 crisis, and the situation is different now. We do not have any intention to use capital controls," he said.

But as the sense of crisis in emerging markets grows as each day brings a fresh bout of turmoil, analysts say more needs to be done.

(Read more: Syria casts 'big black cloud' on emerging markets)

"In June, when we had the first wave of selling in emerging markets, that was global and it was clearly too early to intervene. But now, where the problems are becoming more isolated, it is coming closer to the time where aggressive intervention is needed," said Jens Nordvig, global head of currencies at Nomura.

India, where the rupee has slumped 25 percent so far this year and the local stock market has tumbled 7 this month alone, has fallen under particular criticism for not doing more in recent years to buffer its economy from a possible tightening of global liquidity.

On Wednesday, the central bank said it would provide dollars directly to state oil companies, in a latest effort aimed at supporting a crumbling currency, on top of recent moves that include raising import taxes on gold and silver and tightening rules on how much local companies and citizens can invest abroad.

Others said emerging markets could issue a stern warning to markets just as European Central Bank chief Mario Draghi did last year when worries about Spain's financial woes triggered turmoil in European markets.

(Read more: Goldman downgrades emerging Asia currencies)

"If the RBI [Reserve Bank of India], Bank Indonesia or Brazil or Turkey, go like Draghi and say 'we'll do whatever it takes' to defend our currencies, it may work for a week, two weeks but at what cost?," said Mirza Baig, head of foreign exchange and interest rate strategy at BNP Paribas.

"By spending their reserves [to defend currencies] in a haphazard manner, these countries are at risk of a credit downgrade at that's even worse in the medium term," he added.

—By CNBC.Com's Dhara Ranasinghe; follow her on Twitter @DharaCNBC