(GBtimes) China’s US Treasury holdings hit five-month high amid trade tensions

(GBtimes)

China increased it US treasury holdings by US$11bn to a five-month high of US$1.19tn in March. China News Service

While China accounts for 15 percent of global GDP, its currency’s share was only 1.85 percent of international payments.

China raised its holdings of US Treasury bonds to a five-month high in March, official data showed on Tuesday.

According to the US Department of Treasury (USDT), China, Washington’s largest foreign creditor, increased its holdings of US Treasury securities by US$11bn to US$1.19tn, The Paper reports.

The USDT stated that Beijing’s share represents nearly 46 percent of its total securities over the past 12 months.

China acquired US$8.5bn worth of securities in February, despite speculation that the world’s second largest economy would cut its holdings due to trade issues with the US, which intensified in March.

Statistics from China’s central bank indicates that the country’s foreign exchange reserves rose to US$3.14tn in March. The drastic rise in return rates linked to ten-year US Treasury bonds may have also contributed to China’s move.

Chinese authorities reiterated in April that the operation of China’s forex reserves is based on three major principles: maintaining the US$3tn reserve level, liquidity and certain profitability.

Noticeably, Japan’s holdings were cut by US$16bn to US$1.04tn in March – its lowest since October, 2011. However, Tokyo still remains the second largest foreign holder of US treasuries.