WASHINGTON (AP) — Foreign holdings of U.S. debt rose in March as China ramped up its purchases and displaced Japan as the leading owner of U.S. Treasury securities.
The Treasury Department says overseas ownership of U.S. debt rose 2.1 percent in March to $6.18 trillion. That is below January's record of $6.22 trillion.
China added $37.3 billion of Treasury debt, bringing its stockpile to $1.26 trillion. That's ahead of Japan, which added just $2.5 billion, lifting its total to $1.23 trillion.
In February, Japan became the leading owner of U.S. debt for the first time since August 2008. China overtook Japan that year as the Great Recession, higher government spending and a steep drop in tax revenue pushed up U.S. government borrowing.
The U.S. deficit topped $1 trillion from 2009 through 2012.
Foreign governments, primarily through their central banks, account for two-thirds of the foreign holdings. In March, the total held by foreign governments rose 1 percent from the previous month to $4.13 trillion.
A group of oil exporting nations, which includes Saudi Arabia, Iraq, Algeria, Venezuela and Nigeria, added $500 million to bring their holdings to $297.3 billion, the third largest. Caribbean banking centers, a group that includes the Bahamas and the Cayman Islands, added $10.9 billion, lifting their holdings to $293 billion, the fourth largest.
Demand for U.S. Treasurys, widely considered one of the world's safest investments, is likely to remain strong. While U.S. interest rates are still low, they may climb later this year if the Federal Reserve begins to raise interest rates.