Foreign holdings of US Treasury securities fall in October

AP News
Posted: Dec 15, 2015 4:51 PM

WASHINGTON (AP) — Foreign holdings of U.S. Treasury securities fell in October for the third time in the past four months as both China and Japan, the two largest owners of Treasury debt, trimmed their holdings.

The Treasury Department reported Tuesday that U.S. holdings dipped 0.9 percent to $6.05 trillion after a small 0.1 percent rise in September. Foreigner ownership of Treasury debt is down 2.7 percent from a record high of $6.22 trillion set in January.

For October, China, the No. 1 owner of Treasury debt, reduced its holdings by 0.3 percent to $1.25 trillion. Japan, the No. 2 holder of Treasury debt, cut its holdings by 2.3 percent to $1.15 trillion.

Congress has suspended the government's borrowing limit until March 2017, allowing Treasury to keep borrowing what is needed to run the government. That deal was brokered by former House Speaker John Boehner before he left Congress last month. The deal removes the threat of an unprecedented default on the government's debt until early 2017 when a new president will be in office.

The largest part of foreign holdings are owned by other governments, primarily central banks. These foreign official holdings fell 1.1 percent to $4.10 trillion in October but still made up 68 percent of total foreign holdings.