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Emerging markets draw record debt inflows despite war and tariff risks
Reuters says emerging market debt inflows are at a more than two-decade high this year, as governments issue record bond volumes and investors diversify away from U.S. assets.
Reuters reports that cash flows into emerging markets have remained resilient despite war, tariff risks and swings tied to artificial intelligence, with reforms and deeper local capital markets helping shift demand toward the region.
The outlet points to emerging market debt inflows reaching a more than two-decade high in 2026, alongside governments issuing record amounts of bonds, as stronger foreign exchange reserves and improving policymaking have helped cushion countries from global shocks.
Reuters also notes that the oil and fertiliser price boost from the war that began in February has fed into food prices and broader inflation, even as investors still watch for the U.S. Federal Reserve to potentially raise rates, which could strengthen the dollar and pressure many emerging market currencies.
Bank of America’s David Hauner described 2015 to 2025 as a “valley of tears” period for emerging markets, while LGT Capital Partners’ Jetro Siekkinen said diversification away from U.S. Treasuries is supporting the latest performance, and he cited debt-to-GDP concerns in developed economies.