Talking about interest rates

This chart is getting some attention in the financial City of Madrid. It shows how the downward trend in interest rates of emerging economies has been prolonged into 2013. There must be a message somewhere in it for Mario Draghi, the European Central Bank’s governor: by being too strong a currency, the euro is hurting the improvement in competitiveness and export muscle of peripheral countries like Spain.

Afi analysts said in an investor note that as “inflation was moderate in the last quarter of 2012, and continues being so, central banks in the emerging region have the option of implementing further expansionary monetary measures to boost economic activity and pull back their currencies, which are appreciating due to higher capital inflows.”

Russia is the exception in a line-up of economies that want to keep low exchange-price currencies like Poland, Hungary, India and Colombia–all of them have cut their interest rates in 2013.