China remains largest foreign holder of US bonds: Treasury
January 19, 2015, 10:38 am

China remains the largest foreign holder of US bonds [Xinhua]

China’s holdings of US Treasuries fell for the third consecutive month in November, as yuan appreciation indicated less of an impetus to buy the government securities.

The Treasury said in a monthly report that China had cut its holdings to $1.25 trillion by the end of November.

That was $2.3 billion less than in October.

The Chinese government is trying to move toward a market-determined exchange rate for the yuan, part of its efforts to expand the currency’s use worldwide. The less China intervenes to weaken its currency, the less it needs to buy securities such as US Treasuries.

Meanwhile, US ally Japan purchased more than $19 billion worth of bonds in November and expanded its total holdings to $1.24 trillion.

China, however, remains the largest foreign holder of US bonds, ahead of Japan.

US treasury bonds held by foreign buyers reached $6.11 trillion in November and more than $4.1 trillion of that was held by foreign governments.

India’s holding of US government securities touched a one-year high of $80.5 billion in November 2014. During that month, Brazil and Russia’s holdings stood at $264.2 billion and $108.1 billion, respectively. South Africa, which has the lowest exposure among the BRICS nations, slightly increased its holdings to $10.4 billion in November.

Meanwhile, China’s foreign reserves dropped to $3.84 trillion by the end of December but remained the largest in the world.

That’s down from a record $3.99 trillion at the end of June, when reserves were boosted by China’s current-account surplus and dollar purchases.

TBP and Agencies