Pimco has been wading into Turkey’s bond market, betting that President Recep Tayyip Erdoğan’s commitment to a sweeping economic overhaul has set the country on a path to regaining its investment grade credit rating.
The California-based firm, one of the world’s biggest bond fund managers, has been buying Turkey’s lira-denominated debt since the second half of last year, prompted by Erdoğan’s abrupt change of economic policy after his victory in May’s general election.
“Interest rates have risen substantially, fiscal policy has tightened . . . policymakers continue to unwind unsustainable programmes, encouraging locals to invest back into the lira and away from US dollars . . . these efforts are working,” said Pramol Dhawan, who heads the firm’s emerging markets team.