world growth

world growth

Tuesday, August 19, 2008

China sells 3 billion US treasury bonds

About time ! A good move I think.

China sells 3 billion US treasury bonds

http://www.hinduonnet.com/businessline/blnus/10191206.htm

BEIJING: China, the second largest holder of US treasuries after Japan, has sold three billion dollars of treasury bonds, signalling a plan to look for greener pastures elsewhere, the state media reported. As of June, China held $503.8 billion worth of U S treasury bonds, 3 billion less than in May, the reports quoted a statement issued by the US Department of the Treasury. This is the first time since February that China has cut its holding in the US government finance department, it said.

In the latest Treasury International Capital (TIC) report, China remains the second largest holder of US treasuries by June after Japan, whose holding increased by $5.1 billion in June to $583.8 billion. The UK bought an additional $7.9 billion of bonds to reach $280.4 billion.

Although the TIC data showed China had cut US treasury holdings in June, there is a chance it may turn to other markets for the bonds such as Europe, said professor Ding Zhijie from the University of International Business and Economics. Moreover, the la rge depreciation of the US dollar in June might dash investors confidence and lead to a slash of dollar-denominated assets in the foreign reserves of many countries, the state-run China Daily quoted Ding as saying. Given the expectation of the weakening dollar, measures should be taken to prevent further deduction of dollar assets, Ding suggested. - PTI

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