Foreign holdings of U.S. treasury debt increase to record $5.96 trillion

Amid hostile situations in many parts of the globe, some countries have sought refuge in United States Treasury debt. The Treasury Department released its monthly numbers that show foreign buyers of U.S. Treasury securities rose to another record in the month of April for the ninth consecutive month.

Total foreign holdings of U.S. debt rose from $5.95 trillion in March to $5.96 trillion in April. The largest holder of U.S. debt is China, which actually reduced its holdings for the third straight month by 0.7 percent to $1.26 trillion. Japan, meanwhile, still sits at No. 2 as it boosted its holdings by 0.8 percent to $1.21 trillion.

Belgium, which is in the third spot, slashed its holdings from $381.4 billion in March to $366.4 billion in April. Brazil and United Kingdom each slightly increased their holdings of U.S. debt as they are in the fourth and fifth rankings, respectively.

Caribbean banking centers including the Bahamas, Bermuda and the Cayman Islands declined 1.3 percent to $308.4 billion. Oil exporters (Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya and Nigeria) increased their holdings by nearly $10 billion to $255.5 billion.

Vietnam, South Africa and Peru rounded out the list as they each hold $14 billion or less.

It has been reported that foreign demand for U.S. Treasury debt will remain strong for the remainder of the year. The reason why is because there is a lot more borrowing certainty considering that Congress agreed to suspend the debt limit until March of next year.

However, another debt limit fiasco is expected to arrive this winter as the debt ceiling will be debated, especially as the nation prepares for another long and grueling presidential election cycle. In Aug. 2011, U.S. financial markets were shaken as Standard & Poor’s downgraded its AAA rating of U.S. debt for the first time in its history.

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