China's US Treasury holdings increase
By Martin Crutsinger |
October 19, 2010, Tuesday
|
Print Edition
Print Edition
CHINA, the largest holder of US Treasury debt, increased its holdings for a second straight month in August after two months of declines.
China's holdings of Treasury securities rose to US$868.4 billion in August, the Treasury Department reported yesterday. That's up 2.6 percent and followed a smaller gain of 0.4 percent in July. China's holdings had fallen 2.8 percent in June and 3.6 percent in May.
The debt figures are being closely watched at a time when the US government is running US$1 trillion-plus annual deficits. A drop in foreign demand could lead to higher US interest rates.
Other owners of large stakes in US Treasuries also increased their holdings in August.
Japan, the second largest foreign holder, boosted its stake 1.9 percent to US$836.6 billion. Britain, ranked No. 3, had a 19.8 percent jump in its holdings to US$226.6 billion.
Total holdings of Treasury securities by all countries rose to US$2.28 trillion, an increase of 1.4 percent from July.
Net purchases of long-term securities, a category that includes both government debt and corporate bonds, rose US$128.7 billion in August, more than double the US$61.2 billion increase in July. It was the largest one-month jump since net purchases rose US$141.4 billion in March.
The government reported last Friday that the federal budget deficit totaled US$1.3 trillion for the 2010 budget year, which ended on September 30. That was down US$122 billion from the record US$1.4 trillion deficit set in 2009.
Even with massive budget deficits, the interest rates the government has had to pay for this debt have remained low. That's because the weak economy has depressed borrowing by the private sector and the US Federal Reserve has kept a key interest rate at a record low.
China's holdings of Treasury securities rose to US$868.4 billion in August, the Treasury Department reported yesterday. That's up 2.6 percent and followed a smaller gain of 0.4 percent in July. China's holdings had fallen 2.8 percent in June and 3.6 percent in May.
The debt figures are being closely watched at a time when the US government is running US$1 trillion-plus annual deficits. A drop in foreign demand could lead to higher US interest rates.
Other owners of large stakes in US Treasuries also increased their holdings in August.
Japan, the second largest foreign holder, boosted its stake 1.9 percent to US$836.6 billion. Britain, ranked No. 3, had a 19.8 percent jump in its holdings to US$226.6 billion.
Total holdings of Treasury securities by all countries rose to US$2.28 trillion, an increase of 1.4 percent from July.
Net purchases of long-term securities, a category that includes both government debt and corporate bonds, rose US$128.7 billion in August, more than double the US$61.2 billion increase in July. It was the largest one-month jump since net purchases rose US$141.4 billion in March.
The government reported last Friday that the federal budget deficit totaled US$1.3 trillion for the 2010 budget year, which ended on September 30. That was down US$122 billion from the record US$1.4 trillion deficit set in 2009.
Even with massive budget deficits, the interest rates the government has had to pay for this debt have remained low. That's because the weak economy has depressed borrowing by the private sector and the US Federal Reserve has kept a key interest rate at a record low.
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