Global Dollar-Denominated Sovereign Debt Issuance to Decline in 2025

Governments in Asia and Europe have significantly reduced their dollar-denominated sovereign debt issuance, favoring local currency issuances to avoid exposure to rising US bond yields, currency volatility, and broader concerns about US government finances.

Data from Dealogic showed that dollar-denominated bond issuance by non-US sovereigns fell 19% to $86.2 billion in the first five months of this year compared to the same period last year, the first decline in three years.

At the same time, the data indicated a global surge in local currency sovereign bond issuance to a five-year high of $326 billion so far. This year.

The decline in dollar-denominated bond issuance comes as global investors are moving away from US assets, partly due to tariffs.