China reduced its holdings of U.S. Treasury bonds in November amid an unexpectedly strong surge in overall foreign purchases, official data has shown.
China, the largest holder of U.S. Treasury bonds, lowered its holdings of Treasury securities to $789.6 billion by Nov. 30 from $798.9 billion in October, the Treasury reported.
Overall, net foreign purchases of long-term securities, which largely are Treasury bonds but also include other assets such as corporate bonds and equities, surged to $126.8 billion in the month.
That was a sharp jump from the downwardly revised $19.3 billion in October.
Net foreign purchases of long-term U.S. securities tripled to $129.3 billion.
Net buying by private foreign investors was $96 billion, while buying by foreign official institutions was $33.3 billion.
"The November figure represented a tripling in the pace of foreign buying compared to the slow pace in the past several months," said Ed Friedman of Moody's Economy.com.
U.S. residents, by contrast, sharply reduced their investments, purchasing a net $2.5 billion of long-term foreign securities, about a tenth of what they had bought in October, the Treasury reported.
Net capital flows swung into positive territory in November, reaching $26.6 billion, after negative flows of $13.9 billion in October.
The increase was led by a surge in private net foreign private flows of $26.8 billion.
Foreign holdings of dollar-denominated short-term U.S. securities fell by $27.2 billion. Foreign holdings of Treasury bills decreased by $18.9 billion.
Japan, the second-largest holder of the U.S. investments, increased its holdings to $757.3 billion from $745.9 billion.
Britain, the third-largest holder of U.S. bonds, raised its holdings to $277.5 billion from $230.7 billion.
© AFP 2022