Foreign holdings of US Treasurys hits record high

AP News
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Posted: Jan 18, 2012 9:51 AM
Foreign holdings of US Treasurys hits record high

Foreign demand for U.S. Treasury debt rose in November to the highest level ever, even as China trimmed its purchases for a second straight month.

Total foreign holdings increased 1.7 percent in November to $4.75 trillion, the Treasury Department reported Wednesday.

Japan, the second-largest buyer of Treasury debt, increased its holdings 6 percent to $1.04 trillion.

China, the largest foreign holder, trimmed its holdings 0.1 percent to $1.13 trillion.

The increase in total foreign holdings pushed them to a record level, indicating that foreign demand for U.S. government debt remains strong.

Demand is rising even after a prolonged debate last summer over increasing the nation's borrowing limit. The partisan tenor of the debate led Standard & Poor's to lower its credit rating on long-term Treasury debt.

U.S. government debt is still considered a safe investment. And it has been in high demand as worries about the European debt crisis have intensified.

The 1.7 percent rise in overall holdings in November was the biggest one-month gain since a 1.9 percent increase in September.

After China and Japan, Britain, the third-largest holder of Treasury debt, increased its holdings 4.4 percent to $429.4 billion. Brazil trimmed its holdings 1.3 percent to $206.4 billion.

Net purchases of long-term securities, which includes U.S. government debt and bonds sold by U.S. companies, surged to $59.8 billion in November. That's up from $8.3 billion in October.