CHINA TOPIX

Updated 10:35 AM EDT, Thu, Apr 18, 2019

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China’s US Treasury Holding Declines for Sixth Month; Hits Lowest Level Since 2010

It sold $66 billion worth of US debt in November, taking its holdings to the lowest level since 2010.

(Photo : VCG/GettyImages) China continues to cut its US treasury holdings for the straight sixth month.

China continues to cut its US treasury holdings for the straight sixth month. It sold $66 billion worth of US debt in November, taking its holdings to the lowest level since 2010. China is currently taking steps to boost up its local currency.

The month of November also witnessed the largest monthly decline since December 2011, when the country offloaded $102.7 billion worth of US debt. China gave up its top US debt holder position to Japan in the month of October. The country has taken this step to curb capital outflow.

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The newly released data showed that the country held $1.049 trillion in US debt during the month of November. China has sold $194.66 billion in US treasury during the six months through November. In the past 12 months, it shed $215.11 billion worth of US debt.

Japan continued being the top holder of US treasuries as it held $1.108 trillion worth of US government bonds. However, even the Japanese holdings showed decline as its US treasury reserve in October stood at $1.131 trillion.

The overall foreign holding of US government debt hit its lowest level since 2014 as the November data showed only $5.94 trillion, down $96.1 billion from the month of October. It has sparked the speculation that Fed may increase interest rate in the following months.

China is selling off its holdings for boosting up the value of yuan as well as for containing capital flight out of the country. Yuan has shown a steady decline in its value against dollar throughout the previous year. Its continued selling has brought about more volatility in US government bond prices.

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