LONDON, July 31 (Reuters) - Emerging currencies including the Indian rupee and the South African rand extended losses on Wednesday, hit by weak data and doubts over central bank policy, while equities slumped to two-week lows.

The rupee was most in focus, falling 0.3 percent and adding to a 1.8 percent fall against the dollar in the previous session, when the Reserve Bank of India appeared to pedal back on its commitment to defend the currency at a time when external funding is precarious.

The currency is headed for its biggest weekly loss since September 2011, having fallen more than 3.3 percent versus the dollar, and is close to record lows hit recently. However, it pared some losses and bond yields fell slightly after the RBI and the finance minister sought to reassure markets .

The Turkish lira fell 0.3 percent after data showed the trade deficit widening further, with exports showing a 6 percent decline. The South African rand fell 0.6 percent ahead of trade data that is expected to show that current account financing remains a problem.

The moves come before central bank meetings in the United States, the euro zone and Britain, all of which should reiterate commitment to low interest rates, though the U.S. Federal Reserve is likely to signal a gradual cutback in bond-buying.

U.S. 10-year Treasury yields are at three-week highs before the Fed's 1800 GMT announcement.

'We are seeing substantial dollar moves against emerging currencies...the market is biased for a stronger dollar because at some point the Fed is going to announce a reduction in asset purchases,' said HSBC strategist Murat Toprak.

While the tighter funding backdrop is adding to pressure on emerging markets with financing deficits, currency fortunes also hinge on the policy stances of individual central banks, Toprak said, contrasting Turkey and India.

'There is (disconnect) between India's monetary policy stance and the currency moves, there is no line in the sand,' he said. 'In Turkey, the stance is clear vis-a-vis lira: 'we are here to defend the currency if needed'.'

The Turkish central bank on Wednesday held off from holding its usual one-week repo auction to keep liquidity tight.

Earlier, selling also hit the Korean won which fell 0.5 percent, while the Malaysian ringgit touched new three-year lows. In emerging Europe, the Hungarian forint touched a five-week low to the euro while the zloty fell 0.3 percent.

Emerging equities fell 0.6 percent, shrugging off Chinese pledges to keep economic growth steady but the main MSCI emerging markets index was on track for a small monthly gain after two months of losses.

(Reporting by Sujata Rao; Editing by Mark Trevelyan)

(sujata.rao@thomsonreuters.com)(+44 20 7542 6176 sujata.rao.thomsonreuters.com@reuters.net)

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