Emerging economies continue to discuss cutting reliance on the US dollar, but most lack concrete plans and still invoice exports in dollars because few trading partners accept their currencies. US Treasury International Capital data shows net foreign inflows into US assets reached $212 billion, highlighting persistent demand for dollar-denominated holdings (Ed. note: this is the highest recorded inflow). According to the report, this figure tops previous highs of about $190 billion and $187.1 billion.
Since 2022, some Wall Street analysts have urged investors to diversify into other currency bonds. ING promoted a “Sell America” argument and cited a 9.5% decline in the dollar, as noted in coverage.
Only about one in ten trade deals between emerging markets uses local currencies, leaving many exporters dependent on dollars. Local currencies often lack liquidity and broad acceptance, making them risky for cross-border settlement.
The large inflow into US assets suggests global investors still prefer dollar exposure. That dynamic keeps de-dollarization efforts limited to selective agreements rather than broad currency substitution.
