Emerging economies in Asia and South America are facing a sharp depreciation of their local currencies as the global foreign exchange market has been rattled by China's devaluation and a highly possible U.S. rate hike, data showed Monday.

Starting last Tuesday, China's central bank devalued its yuan more than 4 percent for three days in a row, setting the daily reference rate at around 6.4 yuan to the U.S. dollar.

Dealers said China's aggressive measure has sparked concerns about a series of currency devaluations by the world's major economic powers as global trade seems to lose steam due mainly to an economic downturn in China and Europe.

An imminent rate hike in the United States has also prompted investors to dump local currencies and seek safer assets.

South Korea, which highly depends on China for trade, saw its won hit a near four-year low of 1,190.9 won against the U.S. dollar Wednesday, down 2.36 percent in two days.

Malaysia's ringgit traded at 4.0275 versus the U.S. dollar Wednesday, marking the lowest since the 2008 financial crisis when it hit 4.7125 ringgit. Indonesia's currency plunged to a seven-year low of 13,800 rupiah versus the dollar.

The value of the Brazilian real has depreciated 30 percent from the beginning of this year, while the Turkish lira has hit an all-time low.

Experts noted that the steep fall in emerging markets' currencies could lead to financial turmoil spreading across Asia.

"The depreciation of the Chinese yuan ignited concerns across the world that the Chinese economy is worse than expected," the state-funded Korea Center for International Finance said in its latest report.

"South Korea will likely suffer a direct or indirect impact from the financial unrest in Southeast Asian countries." (Yonhap)