“A long-standing puzzle in international finance is the durability of the dollar’s share of foreign exchange reserves – which remains above 60 percent, while the weight of the US economy in global output has fallen to less than a quarter,” according to the BIS report.

Additionally, the currency mismatch between the emerging markets and the U.S. could continue to deteriorate as many expect the Federal Reserve tighten its monetary policy. [Global Currency War Leaves U.S. Dollar ETFs On Top]

“The corresponding tightening of financial conditions could only worsen once interest rates in the US normalise,” Borio added.

WisdomTree Emerging Markets Corporate Bond Fund

For more information on the fixed-income market, visit our bond ETFs category.

Max Chen contributed to this article.