Welcome to VanEck
Select Investor Type
Marketing Communication
IMF 2025 Spring Takeaways: The Era of EM Exceptionalism
10 June 2025
Read Time 3 MIN
At the Spring IMF Meetings, Eric Fine and our Emerging Markets Debt team observed various tailwinds supporting EM bonds, including a weaker U.S. dollar, stable inflation in EM nations, and growing confidence in emerging market currencies (EMFX).
The team just returned from the IMF Spring meetings, meeting with finance, central bank, and other officials from around the world, along with other market participants. Your authors have been going to these meetings for three decades, so there will be some meta-observations as well.
Key Takeaways
- Dollar depreciation – the U.S. is generating uncertainty, economic weakness, and inflation. EM inflation, on the other hand, remains relatively stable in the majority of EM (and deflationary in China)*. The obvious conclusion arrived at during meetings was that this was very positive for the major currencies and for EMFX, against the USD.
- USD and Treasuries’ reserve status is no longer a taboo topic. This is a completely different topic than USD depreciation, we must emphasize. Up until these Spring 2025 meetings, this topic of reserve status was fringe or taboo. Now that the topic is being discussed, we see it as over-hyped. Our view remains that the USD reserve status will remain and that the proper framing is to see the dollar slowly sharing reserve status with other deserving currencies over time. We do a deep dive later!
- IMF cannot please any of its stakeholders and is defensive. It is seen as unfair to private creditors, which is correct to us. And it has presided over a massive imbalance between mercantilist China and other economies and the big consumers. The IMF will be forced to change, so keep an eye on this space.
- Any U.S. isolationism is a great opportunity for Europe. Euro is a market winner, representing a great tailwind if greater financial integration is an objective. German fiscal expansion is the great hope. And of course, Euro strength is a tailwind for ECB easing. Will Europe grab this opportunity was the open question.
- “Tariffs” transmit uncertainty which maps to recession risk. That’s the big focus and framing. However, the inflationary impact from tariffs is temporary while the ultimate impact is recessionary, so some in the market are trying to see through any inflation risks and to a new Fed chair in May 2026. We also discuss the U.S. stance a bit in this blog.
- Fed independence was a big topic of conversation. It spiced up the now-acceptable discussion on the dollar’s reserve status, obviously. There was a good amount of ideology disguised as economics, pointing to what a long intellectual slog this could be. Sooner or later, the Fed will become dovish.
- The era of EM Exceptionalism. Overall, we feel even stronger following IMF meetings that many EMs could experience upward pressure on their currencies. This would be due to the dollar’s selloff against the major currencies, typically, but there is now obviously “pressure” from the Trump administration to keep EM currencies stable or arguably stronger as part of “trade” negotiations. A country that devalues its currency to compensate for these negotiations increases risks dramatically, and we are struck that so few meeting participants see a scenario of CNY re-valuation (CNY stronger). This is disinflationary for many EMs. EMs generally have higher real rates, making their currencies both attractive and giving their duration upside potentially even before the Fed inaugurates a new cutting cycle.
Investors should remember that past performance is not indicative of future results, and that investing in emerging markets bonds involves risks, such as the foreign currency risk, credit risk and the risk of investing in emerging markets issuers.
To receive more insights, sign up to our newsletter.
* Source: Bloomberg data.
IMPORTANT INFORMATION
This is marketing communication. Please refer to the prospectus of the UCITS and to the KID/KIID before making any final investment decisions. These documents are available in English and the KIDs/KIIDs in local languages and can be obtained free of charge at www.vaneck.com, from VanEck Asset Management B.V. (the “Management Company”) or, where applicable, from the relevant appointed facility agent for your country.
For investors in Switzerland: VanEck Switzerland AG, with registered office in Genferstrasse 21, 8002 Zurich, Switzerland, has been appointed as distributor of VanEck´s products in Switzerland by the Management Company. A copy of the latest prospectus, the Articles, the Key Information Document, the annual report and semi-annual report can be found on our website www.vaneck.com or can be obtained free of charge from the representative in Switzerland: Zeidler Regulatory Services (Switzerland) AG, Neudtadtgasse 1a, 8400 Winterthur, Switzerland. Swiss paying agent: Helvetische Bank AG, Seefeldstrasse 215, CH-8008 Zürich.
For investors in the UK: This is a marketing communication targeted to FCA regulated financial intermediaries. Retail clients should not rely on any of the information provided and should seek assistance from a financial intermediary for all investment guidance and advice. VanEck Securities UK Limited (FRN: 1002854) is an Appointed Representative of Sturgeon Ventures LLP (FRN: 452811), which is authorised and regulated by the Financial Conduct Authority (FCA) in the UK, to distribute VanEck´s products to FCA regulated firms such as financial intermediaries and Wealth Managers.
This information originates from VanEck (Europe) GmbH, which is authorized as an EEA investment firm under MiFID under the Markets in Financial Instruments Directive (“MiFiD). VanEck (Europe) GmbH has its registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, and has been appointed as distributor of VanEck products in Europe by the Management Company. The Management Company is incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM).
This material is only intended for general and preliminary information and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed.
Investing is subject to risk, including the possible loss of principal. Investors must buy and sell units of the UCITS on the secondary market via an intermediary (e.g. a broker) and cannot usually be sold directly back to the UCITS. Brokerage fees may incur. The buying price may exceed, or the selling price may be lower than the current net asset value. The indicative net asset value (iNAV) of the UCITS is available on Bloomberg. The Management Company may terminate the marketing of the UCITS in one or more jurisdictions. The summary of the investor rights is available in English at: complaints-procedure.pdf (vaneck.com). For any unfamiliar technical terms, please refer to ETF Glossary | VanEck.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
© VanEck (Europe) GmbH ©VanEck Switzerland AG © VanEck Securities UK Limited
Important Disclosure
This is a marketing communication for professional investors only. Please refer to the UCITS prospectus and to the Key Investor Information Document (KIID) before making any final investment decisions.
This is a marketing communication for professional investors only. Please refer to the UCITS prospectus and to the Key Investor Information Document (KIID) before making any final investment decisions. This information originates from VanEck Securities UK Limited (FRN: 1002854), an Appointed Representative of Sturgeon Ventures LLP (FRN: 452811) which is authorised and regulated by the Financial Conduct Authority in the UK. The information is intended only to provide general and preliminary information to FCA regulated firms such as Independent Financial Advisors (IFAs) and Wealth Managers. Retail clients should not rely on any of the information provided and should seek assistance from an IFA for all investment guidance and advice. VanEck Securities UK Limited and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Brokerage or transaction fees may apply.
All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
© VanEck Securities UK Limited
Related Insights
Related Insights
1 of 4
11 December 2025
1 - 3 of 3
11 December 2025
