Mainland China’s holding of US Treasury bonds fell for the first time in nearly a year, the US government said Monday after Chinese leaders voiced fear over the soaring US budget deficit.
Other emerging powers Russia and Brazil have also trimmed their US bond holdings, the US Treasury said in its monthly international capital data report.
The three nations plan to purchase tens of billions of dollars in bonds to be issued by the International Monetary Fund (IMF) for the first time, in what is seen as part of moves by the trio to diversify from large dollar holdings.
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Beijing owned 763.5 billion dollars in US Treasury securities in April, the lowest level since ramping up purchases in June 2008, the Treasury data showed. The April holdings fell from 767.9 billion dollars in March.
They do not include US Treasury bond holding in Hong Kong, China’s special administration region, which climbed to 80.9 billion dollars in April from 78.9 billion dollars the previous month.
The decline in the China holding “seems to stem from net selling of Treasury bills,” said Chirag Mirani of Barclays Capital Research.