The yuan ranks in the top three on Pacific Investment Management Co.’s emerging-market investment radar, partly because of a $3.66 trillion currency pile that China’s central bank this week described as excessive.
The slump in Indonesia’s rupiah this month following a 50 basis-point increase in interest rates highlights the risk for Turkey’s central bank should it fail to raise borrowing costs sufficiently to curb outflows.
Indian banks’ dollar bonds are heading for their worst January since before the credit crisis as the fastest inflation in Asia spurs customers to buy gold and property, while deposits fail to keep pace with loans.
Surging oil and food costs may swell budget deficits in Asia as governments spend on subsidies to keep consumer prices low and avoid inflation protests that helped topple regimes in the Middle East this year.
Aberdeen Asset Management Plc and Schroder Investment Management Ltd. said monetary easing and a plan to let foreigners buy more Indian debt will spur gains in the highest-yielding bonds among major Asian economies.