Currency swings are rising in Malaysia at the world’s fastest pace as concern mounts that the ruling coalition will lose its 55-year grip on power after attracting more foreign capital than any other emerging market except Mexico.
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.
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.
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.
India fell short of its target at a seventh straight sale of permits to buy rupee bonds and existing quotas are underutilized by global funds on concern the fastest inflation among the biggest emerging markets will accelerate.