Pimco Sees 7% Devaluation in Chinese Yuan as Economy Slows
- Pimco is betting on losses in Korean, Malaysian currencies
- Asian currency index falls most since region's 1997 crisis
This article is for subscribers only.
Pacific Investment Management Co. said the Chinese yuan is poised to weaken another 7 percent, after the central bank devalued the currency in August in a move that sent emerging-market assets tumbling.
The People’s Bank of China will also cut deposit rates in the nation by 75 basis points and reduce the required reserve ratio for banks by 200 basis points, according to Pimco. Investors can expect declines in Asian emerging-market currencies including the South Korean won and Malaysian ringgit as a result, according to a report Thursday by portfolio managers Adam Bowe in Sydney, Isaac Meng in Hong Kong and Tadashi Kakuchi in Tokyo.