Record foreign desire for US debt
Source: Agencies |
April 17, 2012, Tuesday
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Print Edition
Print Edition
FOREIGN demand for US Treasury debt rose to a record high in February, and China, the largest buyer of Treasury debt, increased its holdings for the second straight month.
Total foreign holdings rose 0.8 percent to US$5.1 trillion, marking the seventh consecutive monthly increase, the US Treasury Department reported yesterday.
China boosted its holdings 1.1 percent to US$1.18 trillion, its second straight hike. China had trimmed its holdings for five straight months before the January increase. Japan, the second-largest buyer of Treasury debt, raised its holdings 1.2 percent to US$1.1 trillion.
US government debt is considered one of the safest investments. Demand has risen as investors have looked for a safe haven given Europe's debt problems.
Brazil, the third-largest foreign buyer of Treasury debt, cut its holdings to US$225.5 billion. Britain reduced its holdings to US$103 billion.
Part of that change reflected the Treasury's efforts to better track the ultimate holder of the bonds. In the past, Britain's holdings were inflated by purchases that occurred on London markets but actually represented holdings by residents of other countries.
Demand for foreign holdings has remained strong despite the first-ever downgrade of the government's debt in August. Standard & Poor's lowered its rating on long-term Treasury debt one notch from AAA to AA+ following a prolonged debate in Congress over increasing the nation's borrowing limit.
America's borrowing needs will remain high based on projections of future deficits.
Total foreign holdings rose 0.8 percent to US$5.1 trillion, marking the seventh consecutive monthly increase, the US Treasury Department reported yesterday.
China boosted its holdings 1.1 percent to US$1.18 trillion, its second straight hike. China had trimmed its holdings for five straight months before the January increase. Japan, the second-largest buyer of Treasury debt, raised its holdings 1.2 percent to US$1.1 trillion.
US government debt is considered one of the safest investments. Demand has risen as investors have looked for a safe haven given Europe's debt problems.
Brazil, the third-largest foreign buyer of Treasury debt, cut its holdings to US$225.5 billion. Britain reduced its holdings to US$103 billion.
Part of that change reflected the Treasury's efforts to better track the ultimate holder of the bonds. In the past, Britain's holdings were inflated by purchases that occurred on London markets but actually represented holdings by residents of other countries.
Demand for foreign holdings has remained strong despite the first-ever downgrade of the government's debt in August. Standard & Poor's lowered its rating on long-term Treasury debt one notch from AAA to AA+ following a prolonged debate in Congress over increasing the nation's borrowing limit.
America's borrowing needs will remain high based on projections of future deficits.
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