China returns as biggest holder of U.S. Treasuries

NEW YORK (Reuters) – China returned as the United States’ largest foreign creditor in March, even as overall foreign central bank holdings of U.S. Treasuries fell, U.S. government data showed on Friday.

China held $1.261 trillion in U.S. Treasuries in March, the most since September and up from $1.224 trillion from February, the Treasury Department data showed.

Japan slipped back to No. 2 with $1.227 trillion, above $1.224 trillion in February.

Belgium, which as recently as February was the No. 3 holder of U.S. debt, saw its holdings plunge in March by $92.5 billion to $252.8 billion.

Analysts have said the country’s holdings had risen due to foreign accumulation of Treasuries held in custody accounts at Belgium-based clearing houses.

“This suggests that the run-up is finally starting to unwind, with Chinese holdings spiking $37.3 billion in March,” Gennadiy Goldberg, interest rate strategist with TD Securities, wrote in a research note.

The decline in overall foreign central bank holdings of Treasuries accelerated in March. They fell $23.69 billion, marking the largest monthly decline since April 2013 when they decreased by $23.78 billion.

Private investors bought $35.35 billion U.S. government debt in March, the highest amount since September.

Net buying of long-term U.S. assets totaled $17.6 billion in March from a revised inflow of $20.9 billion in February.

Including short-dated assets such as bills, overseas investors sold $100.9 billion March after a revised inflow of $28.8 billion the month before. The drop was the first in three months.

In December, net foreign sales of all U.S. assets totaled $191.5 billion.

Private overseas investors sold $90.5 billion in U.S. assets, the most since a $160.5 billion drop in December.

Official foreign sales of U.S. assets totaled 10.4 billion following combined net purchases of $39.1 billion in January and February.

(Reporting by Gertrude Chavez-Dreyfuss and Richard Leong; Editing by Matthew Lewis and Richard Chang)

Free newsletter signup
Never miss another Bankless Times news story as we send you hand-picked articles every morning
We hate spam. Your email address will not be sold or shared with anyone else. You will only receive our daily newsletter. You can unsubscribe at any time.