Already one of this year’s most embattled asset classes, things could worse before they get for emerging markets currencies. At least that is the view held by some market participants that view fiscal and monetary policy efforts to stem the tide of slumping currencies as ineffective in some countries.

The WisdomTree Emerging Markets Currency Fund (NYSEArca: CEW) is down nearly 8% year-to-date. CEW holds currencies including the Mexican Peso, Brazilian Real, Chilean Peso, Colombian Peso, South African Rand, Polish Zloty, Russian Ruble, Turkish New Lira, Chinese Yuan, South Korean Won, Indonesian Rupiah, Indian Rupee, Malaysian Ringgit, Philippine Peso and Thai Baht. Nearly all of that group, with the Yuan and the Zloty the noticeable exceptions, have been pounded this year. [Solid Zloty Helps Poland ETFs Stand Strong]

“This prospect of higher interest rates in the United States is having a very negative impact on many EM currencies, with the Indian Rupee, Indonesian Rupiah, Brazilian Real and Turkish Lira all falling sharply early last week in response to rising U.S. rates and now down by 10-15% year-to-date. The oft-repeated theory is that rising U.S. interest rates are sucking money out of these currencies,” said David Kelly, Chief Global Strategist at J.P. Morgan Funds, in a note published earlier this week. [Falling Currencies Killing EM ETFs as U.S. Rates Rise]

The Rupee and Rupiah have been especially problematic. Those plunging currencies have exacerbated current account deficits in India and Indonesia. India, Asia’s third-largest economy, and Indonesia, Southeast Asia’s largest economy, have widening account deficits. As a result, there has been some faint chatter regarding sovereign debt downgrades for those countries, though such action does not appear likely in the near-term.

Citibank believes Indonesia’s central bank needs to boost rates by 50 basis points and sound a more hawkish tone.

“With reserves declining sharply, CB FX intervention is no longer a credible policy option to anchor expectations on IDR. We think a market stabilization program via SOE funds does not fundamentally address external imbalances. Even while core inflation pressures remain manageable in the 4.5-5% range (we estimate 1% depreciation in IDR will raise inflation by 0.1ppts), the economy already slowing, and some macro-prudential tightening in place, the signaling effect of policy rate hikes should not be underestimated, in our view, especially given still elusive turnaround in the trade/CA deficit,” said Citi in a note posted on Zerohedge.