By Alberto J. Boquin, CFA
This year's COVID shock accelerated a secular decline in interest rates around the world. Emerging market ((EM)) rates are no exception. The yield on the JPMorgan Emerging Market Local Currency Index (GBI-EM) declined to a series low of 4.6% compared to a 6.3% average in the prior decade. However, looking at the index can be misleading as there is plenty of dispersion beneath the surface. Higher-quality EMs have seen their interest rates converge toward developed market levels, but there remains a posse of lower-quality EMs where equilibrium rates continue to