EMERGING MARKETS-Stocks hit 28-month lows on Fed outlook; cenbanks in focus

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South Africa cenbank decision due 1300 GMT

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Turkey cenbank decision due 1100 GMT

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Brazil holds interest rates after 12 straight hikes

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Indonesia raises rates for 2nd straight month

(Adds details on broader emerging markets; updates prices)

By Anisha Sircar and Amruta Khandekar

Sept 22 (Reuters) - Emerging market currencies and stocks declined on Thursday as the dollar surged after an aggressive view for U.S. interest rates from the Federal Reserve, with investors focusing on a slew of other interest rate decisions due in the day.

The Fed on Wednesday lifted its policy rate by 75 basis points (bps) for the third time and projected raising rates further and faster than investors had expected.

China's onshore yuan ended at a 27-month low of 7.08 per dollar, while broader EM currencies fell for a second straight day, down 0.4%.

"The message was more hawkish than expected, so the market is taking in the information and you may see volatile sessions till end of the week," said Cristian Maggio, head of portfolio and ESG strategy at TD Securities.

Stocks fell 0.9% to their lowest level since May 2020, tracking a global risk-off as the dollar surged to a fresh two-decade high.

EM shares are now down more than 25% so far this year and are on pace for their worst year since the 2008 financial crisis, as markets digest a deteriorating global growth outlook on the back of surging inflation, aggressive tightening cycles and rising geopolitical risks.

South Africa's rand gained 0.6%, with investors eyeing a likely 75 bps hike by the South African central bank in a bid to help bring inflation back within its 3%-6% target range.

Turkey's central bank's decision is also due later in the session, with analysts expecting the bank to hold rates at 13% after surprising with a rate cut last month.

"The direction of travel is for higher rates, but in Turkey, there is a risk of cuts, which will be a nonsensical decision. It would be even more difficult to understand a decision of that kind today, given inflation has moved beyond the 80% mark," Maggio added.

The lira traded at 18.3 per dollar.

Hong Kong, meanwhile, raised its base rate by 75 bps to 3.5% in its first rate hike since September 2018, while the Philippine central bank raised rates by half a percentage point, as expected.

Indonesia hiked rates by a surprise 50 bps, while Taiwan hiked rates by 12.5 bps, reflecting continued concerns about inflation.

The rupiah pared most losses from earlier in the day to slip 0.1%, while Philippine's peso fell 0.5%.

Brazil's central bank on Wednesday held rates unchanged after 12 consecutive hikes, in line with expectations.

Other countries' central banks expected to announce decisions on Thursday also include Egypt and Paraguay. For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX

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(Reporting by Anisha Sircar in Bengaluru; editing by Uttaresh.V)