BUZZ-COMMENT-Emerging nations fuel a crisis for their currencies

Feb 7 (Reuters) - Several emerging nations are encouraging their currencies to drop, with central banks unusually moving out of step with the Federal Reserve to lower interest rates.

Not only is this a marked change in behaviour, interest rates are being lowered when currencies are extremely weak.

Cutting interest rates when currencies are so close to record lows seems reckless with those lowering rates having little concern for the currencies that are suffering.

To put this into context, the Philippine peso and Indonesian rupiah are very close to the lows achieved in the midst of the Asian Financial Crisis in the 1990s, while India's rupee and China's yuan have reached new record lows.

While Malaysia has kept its interest rate steady for 10 consecutive months, the ringgit is perilously close to a record low.

Easier monetary policy in South Korea and Singapore has undermined those nations' currencies at a point when the dollar is being supported by the risk-averse reaction to tariffs on U.S. imports.

Turkey is slashing interest rates despite the lira's record weakness, while the drop for Mexico's interest rate is putting pressure on the peso in the middle of a trade spat that is boosting the dollar versus much more liquid major currencies.

Less liquid minor currencies could collapse if their declines are facilitated by the policies of their central banks during a period when lots of cash is already heading towards the safety of the world reserve currency.

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