In the ninth consecutive monthly increase, foreign holdings of US Treasury debt rose 0.2% to a record high of $5.96 trillion in April – and the trend is set to continue for the rest of the year, it has been reported.
Japan, the second largest buyer of US Treasury debt, raised its holdings 0.8% to $1.21 trillion, whilst Russia reversed a downward trend of five months to increase holdings by 15.9%, taking the total up to $116.4bn. Improved borrowing certainty is thought to have stimulated demand, sparked by a congressional agreement to put off another standoff over raising the debt ceiling until March 2015.
The overall increase comes in spite of China, the US Treasury’s biggest buyer, reducing its holdings for the third month in a row, this time by 0.7% to $1.26 trillion. Belgium and a number of Caribbean buyers also reduced their holdings.
A total of US$4.88 trillion of debt has been sold so far this year reports Dealogic, close to the level of 2007 when US$4.91 trillion of bonds were issued over the same period.
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