Philip Morris International Inc., the world's largest listed tobacco company, reduced its 2012 earnings forecast the next day because of currency swings. The New York-based maker of Marlboro cigarettes gets more than 40 percent of its operating profit from Asia and Latin America, according to data compiled by Bloomberg.

A weaker real and lower interest rates in Brazil may reduce Coca-Cola Co.'s second-quarter profit by $30 million, according to JPMorgan. The Atlanta-based company left about $3 billion in cash in Brazil at the end of 2011 to take advantage of the country's higher interest rates, Chief Financial Officer Gary Fayard said in a conference call in February. Half of the positions were left unhedged, he said.

Bearish Bets
"All the BRIC looked ugly," John Taylor, who oversees $3.5 billion as founder of currency hedge fund FX Concepts LLC in New York, said in an phone interview on June 19. The real and ruble will suffer "fairly decent" declines later this year as a global recession spurs investors to buy dollars as a haven, Taylor said.

After spending most of last year introducing policies to weaken their currencies, emerging-market governments are now working to limit the slide amid capital outflows.

Brazil's government pared a tax on overseas loans on June 14 and has used swaps to add dollars to the market. Russia's central bank sold U.S. currency this month to slow the ruble's retreat, according to Chairman Sergey Ignatiev. India cut the amount of overseas income companies can hold in foreign exchange last month, spurring them to repatriate earnings. The ownership ceiling on government bonds was raised by $5 billion to $20 billion, the central bank said in an e-mailed statement today.

Investors withdrew $6.3 billion from Brazil's stocks and bonds in May, the most since at least 2010, central bank data show. Russian capital outflows reached a net $46.5 billion in the first five months of the year, including $5.8 billion in May, which is "a lot" for the country, Ignatiev told reporters in St. Petersburg on June 6.

Consumer Defaults
Derivatives traders see no sign of a turnaround. Wagers on a weaker real on Sao Paulo-based BM&FBovespa's futures exchange rose to $4.7 billion on June 12, the most since February 2010, according to data compiled by Bloomberg.

Option traders are the most bearish on the ruble since October and they expect price swings in the rupee to be the biggest in Asia, the data show. Twelve-month forward contracts on the yuan are pricing in a further decline of 0.7 percent in 12 months.

A surge in bad loans in Brazil will weaken the real further, said Amit Rajpal, who manages global financial funds for London-based Marshall Wace LLP. The default rate on consumer debt rose to 7.6 percent in April, matching the highest level since December 2009, as lending growth slowed to 18 percent from a record 34 percent in September 2008, according to the central bank.

India Deficit
"What we'll see now is basically a full-blown credit problem," said Rajpal, who predicts rising defaults in Brazil will resemble the collapse of the U.S. subprime mortgage market five years ago.

In India, Prime Minister Manmohan Singh is grappling with trade and budget deficits, corruption scandals and fighting in the ruling coalition. The country may become the first among the BRIC nations to lose its investment-grade rating, Standard & Poor's and Fitch Ratings said this month. India's budget gap amounted to 5.8 percent of gross domestic product, compared with 4.2 percent in Portugal and 3.9 percent in Italy, according to data compiled by Bloomberg.