EM Investors Are Favoring Local Bonds as Dollar Debt Lags

Emerging-market investors are purchasing local-currency sovereign debt while avoiding dollar-denominated bonds from developing nations, according to market activity in 2026. Treasury yields have risen, making dollar-denominated emerging-market bonds less attractive relative to U.S. government securities. This shift reflects investor preference for bonds issued in the local currencies of emerging economies rather than those denominated in U.S. dollars.

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