China increases US treasury to almost 1-year high

WASHINGTONChina increased its holdings of US Treasuries to the most in almost a year, an indication that government policies helped curb capital flight.

China’s holdings of US bonds, notes and bills rose for the sixth straight month to US$1.17 trillion (RM4.9 trillion) in July, an increase of US$19.5 billion from a month earlier, according to Treasury Department data released on Monday in Washington. Japan owned US$1.11 trillion, up by US$22.3 billion from June, marking the biggest gain in almost four years.

China in June regained its position as the largest foreign holder of US Treasuries. Japan had held the spot for eight months.

The two countries account for more than a third of all foreign ownership of Treasuries, which gained by US$78.7 billion to US$6.25 trillion in July, the figures showed. That brings foreign investors’ holdings of US Treasuries to the highest since June 2016.

China’s foreign-exchange reserves increased for a seventh month in August to US$3.09 trillion. China’s capital outflows have eased amid tighter controls, helping steady the currency, which has climbed about 6% this year after weakening 7% in 2017. The country’s central bank last week effectively removed a reserve requirement that may slow the pace of yuan appreciation.

Belgium’s ownership of Treasuries, often seen as a home to China’s custodial accounts, rose to US$99.4 billion in July from US$98.3 billion. — Bloomberg