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LONDON, Jan 17 (Reuters) - The Turkish lira hovered near record lows and the South African rand near five-year lows on Friday, with deficit countries continuing to suffer from a scheduled withdrawal of U.S. monetary stimulus.
Turkey and South Africa are among the countries most reliant on foreign investor flows and have been hit by the reduction from this month of the Federal Reserve's bond-buying programme that had boosted riskier assets.
Local events have also been negative for these countries in recent days, with Turkey in the throes of a corruption scandal and manufacturing data this week in South Africa showing a contraction in December.
The central bank has also held back from raising rates in Turkey, although prices have been rising.
"It has shown more tolerance for a weak currency but eventually will have to raise interest rates because of inflation," said Salman Ahmed, global strategist at Lombard Odier Investment Managers.
The lira dipped 0.13 percent towards record lows set on Thursday and the rand steadied above the previous session's five-year lows.
The rouble tested 4-1/2 year lows against its dollar-euro basket and hit fresh four-month lows against the dollar after the central bank said this week it was cutting "targeted" interventions as part of a strategic shift towards letting the rouble float completely freely.
The Serbian dinar fell slightly after Fitch cut the country's rating to B+ from BB-, citing deteriorating public finances and debt ratios.
The Ukrainian hryvnia tested four-year lows after supporters of Ukrainian President Viktor Yanukovich rammed a sweeping law through parliament on Thursday in an attempt to curb anti-government protests.
Ukrainian assets have rallied in recent weeks after the country got a $15 billion bail-out from Russia.
"This new legislation... comes in the aftermath of the biggest anti-government protest in almost 10 years and risks causing the rallies to flush again," said analysts at SEB in a client note.
But emerging equity and debt markets were generally stable ahead of U.S. data later on Friday including industrial production and housing starts.
The MSCI emerging equities index was steady, on course for a small 0.5 percent gain this week, and emerging sovereign debt spreads tightened by 2 basis points to 345 bps over U.S. Treasuries.
China shares, however, sank to their lowest in 5-1/2 months, as the resumption of initial public offerings sapped already limited liquidity and concerns about shadow banking rose.
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