US debt holdings increase in August
China’s holdings of US treasuries rose for a third consecutive month in August to the highest in a year on the back of rising foreign exchange reserves and expectations that the greenback may appreciate further.
The country’s total holdings of US bonds, notes and bills rose by $34.5 billio on a monthly basis in August to $1.2 trillion, according to data from the US Treasury Department on Tuesday.
Japan, which overtook China as the largest holder of US treasuries last October, cut its holdings by $11.4 billion to $1.1 trillion in August.
“China has continued to increase its holdings of US treasuries as it had a trade surplus and forex reserves were increasing,” said Deng Haiqing chief economist of JZ Securities, adding that other factors like a weaker euro had also prompted the purchases.
China’s foreign exchange reserves rose to their highest level so far this year in September to $3.11 trillion, marking a growth for the eighth straight month.