Major creditor countries increase holdings of US Treasuries in July
- Source: People's Daily Online
- [17:07 September 17 2009]
- Comments
According to the data released by US Treasury Department on September 16, the increase in foreign creditors' holdings of US Treasury bonds is significantly lower than June's 90.7 billion US dollars. And in May this year foreign investors reduced holdings of 19.4 billion US dollars of US Treasury bonds.
China is America's largest creditor and Japan remains the second largest creditor of the United States. In July, Japan's holdings of US treasury bonds reached 724.5 billion US dollars, an increase of 12.7 billion US dollars over the previous month. In addition, Britain increased holdings of US Treasury bonds by 60 billion dollars in July, but Brazil and Russia made a slight reduction in their holdings of US Treasury bonds.
The US Treasury Department released Treasury International Capital System (TIC) of July on September 16. Data show that while China's holdings of US Treasury bonds increase, other major creditor countries also increase their holdings in July.
In July, Japan's holdings reached 724.5 billion US dollars, an increase of 12.7 billion US dollars. Britain increased its holdings by 6 billion US dollars up to 220 billion US dollars, and the Caribbean countries increased holdings by 3.5 billion US dollars to 193.2 billion US dollars. In total, foreign creditors increased holdings of US Treasury by 45.5 billion US dollars in July, amounting to 3.428 trillion US dollars.
What makes tracking the US cross-border capital flow data so important is that the market hopes to determine the demand conditions of the US Treasury bonds through the data, and thus predict the US Treasury prices and yields.
Analysts believe that as the United States is still on the bumpy road towards recovery, the risk of holding US dollar and US Treasury bonds will remain for a long time.
