China cuts holdings of US treasuries by US$5.4b
0 
 |
|
Despite the cut in holdings, China remains the largest foreign holder of US debts. |
China slimmed its holdings of U.S. treasuries in January by US$5.4 billion to US$1.15 trillion, but still remained the largest foreign holder, according to data released by the US Treasury Department on Wednesday.
This is the third consecutive month that China trimmed its US debt holdings, which peaked at nearly 1.18 trillion last October.
Among the top five foreign holders of US debts, China is the only one to have reduced holdings in January. After the cut, Chinese holdings account for 26 percent of total foreign holdings of Treasure securities.
Japan, the second largest foreign owner, increased its holdings by US$3.6 billion to US$885.96 billion in January. Third largest holder Britain raised its holdings to US$278.4 billion, from the previous of US$272.1 billion in last December.
The US$5.4-billion cut reflects China's move to diversify its foreign reserve portfolio in order to ensure asset safety and stable returns.
China currently has the largest foreign exchange reserves in the world. By the end of 2010, the country's outstanding foreign exchange reserves topped US$2.8 trillion, 41 percent of which were US treasuries.
The US debt figures are now under close watch because Americans have started to believe that their country's surging debt is unsustainable. U.S. federal budget deficit reached 1.29 trillion dollars in the fiscal year 2010 ended September 30. According to President Obama's fiscal year 2012 budget, the U.S. federal deficit in 2011 is expected to hit a new record of 1.65 trillion dollars.
Go to Forum >>0 Comments