Bond managers reeling from PBoC's devaluation
The PBoC's surprise 1.9% devaluation of the renminbi has left a hole in bond fund managers’ portfolios. Economists and managers say the coming week will be crucial in seeing what was behind the move.
China’s shock devaluation of the renminbi is set to have a damaging effect on bond fund managers since most of their portfolios are not hedged for currency risk.
After yesterday's move by the Chinese central bank took markets by surprise, Hong Kong bond fund managers said the heightened volatility meant they would need to refashion their strategies.
It comes amid growing fears of a ‘”currency war” in Asia, with other central banks in the region also devaluing in recent months.
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