The Asian financial crisis at the end of the last century marked a turning point, as the governments of these countries came to the painful realization that such dependence on the greenback made them extremely vulnerable to changes in US monetary policy.

The currency of an emerging - if not exotic - country already tends to depreciate structurally faster than the currency of a major economic power, in most cases because the former's standards of governance are less convincing, or its political stability poorly assured.

The situation suddenly worsens when the dollar appreciates as a result of a shift in the Fed's monetary policy and a rate hike, for example to combat a resurgence of inflation in the United States.

In such a case, the emerging country could find itself exposed to the scissor effect - depreciating domestic currency, appreciating borrowed currency - and be precipitated into a sudden default.

Brazil is one of those countries that have tried to free themselves from this painful dependence on sovereign debt denominated in greenbacks. This was made all the easier by the fact that, as a major oil producer, it sold its barrels in Uncle Sam's currency; hard currency revenues were thus assured by exports rather than borrowings.

However, this has hardly benefited the real, whose depreciation against the dollar has been spectacular: almost 65% in ten years, over 30% in five years, and 25% over the last twelve months. The plunge against the euro is also critical, approaching 50% in ten years, 25% in five, and almost 15% over the last twelve months.

There are two reasons for this phenomenon. Firstly, investors' distrust of Lula - already disgusted by the rampant corruption in Brazil - and secondly, the fact that Brazilian sovereign debt, largely denominated in real, is mainly held by local creditors.

This configuration naturally makes it more tempting and easier to print money than when a government is faced with international creditors who lend in dollars and demand to be repaid in dollars; it also keeps it away from the wrath of the IMF.

But this policy is no panacea, as the fall of the real bears witness. Re-elected in 2023 after a stint in prison for corruption, Lula has stuck to an aggressive fiscal policy that is widening deficits; Brazil's central bank is already anticipating the worst, having set a key rate 150% higher than the official inflation rate.

As for international investors, they are short-selling the Brazilian currency, made all the more unattractive by the fact that ten-year US Treasury bonds are yielding almost 4.7%. This case illustrates the difficult monetary equation facing governments in emerging countries, for whom no solution is ideal.