The World Bank’s global bond fund for emerging local market currencies may be established with a corpus of $5 billion. The fund, which is expected to roll out this year, will have contributions from forex reserves of 25 emerging economies and funds from private institutional investors.
The bank will establish procedures for selecting the fund manager, who will raise funds and invest them in local currency bonds of emerging markets.
The US-based PIMCO, with the largest emerging market debt portfolio of $35 billion, is being looked at as a prospective fund manager along with Oppenheimer, Alliance Bernstein, Deutsche, JP Morgan and Fidelity, among others.
“The fund will have an initial corpus of $5 billion with a major part of it coming from the $2 trillion of forex reserves of emerging markets across the globe. Private institutional investors, too will be encouraged to invest in the fund,” World Bank regional vice-president (South Asia) Praful Patel told ET.
Read more here…
