(Removes "zone" from first paragraph)
By Chris Vellacott
LONDON, March 19 PIMCO has reduced allocations
to the euro in response to a planned levy on deposits in Cyprus
and is rethinking forecasts of when the bloc will begin its
recovery, a senior executive said.
Saumil Parikh, managing director and member of the firm's
Investment Committee told Reuters in an interview in London on
Tuesday, the proposed terms for a banking bailout, which include
the levy, "suggests a more bumpy road for Europe."
"We've reduced our allocations to European currency (in the
last 24 hours) because it makes sense to think about this as not
only a policy mistake but also a recognition that the euro is
far from being a perfect reserve currency," he said.
Parikh highlighted he has not made significant changes since
the planned levy was announced but said imposing a levy on
depositors would represent "a significant departure" of the euro
from other reserve currencies.
(Editing by Tommy Wilkes)