May 31, 2018 / 10:18 AM / 3 months ago

BlackRock EM fund has bought Turkey's lira, dollar-bonds

LONDON, May 31 (Reuters) - Asset manager BlackRock has raised its exposure to Turkey’s battered currency and hard-currency bonds in the wake of the recent sell-off, Sergio Trigo Paz, the firm’s head of emerging markets portfolio management, said on Thursday.

“We have lately invested in Turkey over the last week,” said Trigo Paz, whose firm has $29 billion under management across emerging debt markets.

“We like the currency now and the dollar debt, but we don’t like rates because...(with) rates there is still a situation where inflation needs to be stabilised, it’s too early to go there.”

Investors have hammered the lira in May - at one point sending it down by as much as 20 percent this year - on concerns about President Tayyip Erdogan’s drive for lower interest rates in the face of rampant inflation.

The selling accelerated this month after Erdogan said he would look to take greater control over monetary policy following June 24 presidential and parliamentary elections.

The market rout last week forced the central bank to hike rates by 3 percentage points at an emergency meeting. The bank has also announced plans to move to a single policy rate.

Asked how much a risk he thought the upcoming election could pose to investors, Trigo Paz said he would take it “one thing at a time.”

BlackRock is the world’s largest asset manager. (Reporting by Karin Strohecker; Editing by Toby Chopra)

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