Currencies
Pimco Calls FX Regime Into Question Amid Wild EM Currency Swings
- Volatility in Mexico, Brazil has deterred investments: Dhawan
- Two-thirds of countries have pegged or managed exchange rate
Pacific Investment Management Co. headquarters in Newport Beach, California.
Photographer: David Swanson/BloombergThis article is for subscribers only.
Recent bouts of currency volatility in the developing world have prompted Pacific Investment Management Co., one of the largest emerging-market investors, to question the efficacy of a floating exchange rate regime.
Pramol Dhawan, head of the EM team at the $2 trillion asset manager, said swings in currencies like the Mexican peso and Brazilian real have gotten so high that it’s become a hurdle to investing. On the other hand, countries like Egypt, Nigeria and Dominican Republic, where authorities keep a controlled FX policy, have become more interesting, he said.