While a falling U.S. dollar typically benefits developing nations by easing debt burdens and lowering import costs, current conditions tell a different story. Since early April 2025, the dollar's value has dropped about 4% against major currencies, but this decline is intertwined with geopolitical shifts and trade tensions, making it less of a relief for emerging markets.

These economies are more vulnerable partly due to U.S. tariffs and a global trade reshuffle initiated by the current administration. Reduced American demand and increased trade barriers are expected to slow growth for countries reliant on exporting goods. Many emerging markets have seen their currencies fall even more than the dollar, with stock markets and corporate credit values also down. Borrowing costs in dollars for many poorer nations have risen, limiting their financial flexibility despite the weaker dollar.

Looking ahead, the dominance of the dollar as the world's reserve currency is in question. Experts forecast a multipolar currency system involving the euro, yuan, and dollar, which could strip emerging economies of the current benefits linked to the "exorbitant privilege" enjoyed by the U.S. This transition may increase costs and risks for poorer countries as they navigate new currency blocs amid geopolitical uncertainty. The dollar’s decline, while advantageous for some global powers, signals deeper economic challenges for developing nations.