Press "Enter" to skip to content

China cuts US Treasury bonds by $13.7B in September

CHECK THE WIRE FOR REAL-TIME NEWS UPDATES

China sold off a sizeable volume of its US Treasuries in September, in a move which state-owned media says is intended to prop up the yuan in stead of retaliating against the United States amidst ongoing trade tensions.

China held $1.15 trillion in US Treasuries as of the end of September,  a decline of around $13.7 billion compared to the previous month, according to data released by the US government.

While the fall brings holdings to their lowest level since mid-2017, China nonetheless remains the largest holder of US Treasuries, followed by Japan with $1.028 trillion.

China and Japan jointly account for over a third of US sovereign debt held by foreign creditors, which stood at $6.2239 trillion as of the end of September.

State-owned media has made haste to deny speculation that the sale of US sovereign bonds is a form of retaliation against the Trump administration’s tariff measures, pointing instead to efforts to prop up a waning yuan.

“In recent months, the depreciation pressure on the yuan has been fairly strong, which has forced the government to intervene and support the currency,”  said Zhou Yu, director of the Research Center of International Finance at the Shanghai Academy of Social Sciences, to Global Times on Sunday.

“In order to do that, the government has to sell some US bonds in exchange for US dollars, and then sell those dollars to buy yuan.”

Related Post

China’s onshore bond defaults so far this ye... China’s onshore bond market is likely to see defaults continue rising after hitting a record high in 2018, as Beijing’s monetary easing fails to shor...
Bank of China issued 40 billion yuan perpetual bon... The Bank of China issued 40 billion yuan perpetual bonds on Friday, making it the country’s first bank issuer of perpetual bonds, after the authority ...
China’s 10-year sovereign bond yield fell be... The yield on China’s most-active bonds due in a decade broke through the important 3 per cent benchmark for the first time in three years to...
China and Germany to bring financial relations ... China and Germany plan to open their markets wider to each other’s banks and insurers to bring the financial cooperation “to a new high”. The two s...
Overheated convertible bond market raises concerns While Chinese stock market is staging a strong rally since January, debt investors are rushing for a slice of the country’s nascent convertible-bond m...

Top