Interest rate pressure tests emerging market policy credibility

jueves 5 de febrero de 2015 11:54 GYT

* FACTBOX on 2015 rate cuts

* Graphic on inflation in emerging markets

By Sujata Rao

LONDON, Feb 5 (Reuters) - Falling oil prices and rate cuts in Europe are giving emerging market central banks the green light to ease their own monetary policies but investors are fearful that political pressure may be prompting some shifts in stance.

Already fragile trust in policymaking in some countries is being tested by central bank actions and the demands of politicians such as Turkish President Tayyip Erdogan for deeper and faster rate cuts.

Turkey is among several emerging economies that have cut interest rates in 2015 in response to plunging oil prices and aggressive easing in the developed world, and swap markets are pricing in rate cuts of 30-350 basis points in other countries.

That has driven average emerging debt yields a full percentage point lower to 20-month lows, according to the GBI-EM bond index.

But some of these decisions may be dictated by what Societe Generale analyst Benoit Anne dubs "shadow banking" and risk eroding even the partial rate-setting autonomy that emerging central banks have managed to win over the past decade and half.

The challenge comes from governments keen to pump up lacklustre economic growth via lower interest rates.   Continuación...