Foreign investors divest US government bonds

By Marc Castro

Jun 15, 2013 02:58 PM EDT

In April, it was found that foreign investors had divested US governmenbt debt and became net sellers of long-dated US securities for the third straight month according to the US Department of Treasury last Friday.

Much of the activity was focused on Treasury bonds and notes, as overseas investors divested a volume of US$54.5 billion. This was the first net outflow in the past seven months, as private investors sold nearly US$30.8 billion. This volume was the biggest one month outflow according to current records.

Foreigners had sold US$37.3 billion in long term US instruments in April, which is the largest outflow since 2009. For March, the outflow was at US$13.4 billion.

Other official investors, such as central banks also became net sellers of Treasury instruments for April. The largest foreign US creditor, China, decreased its holdings by US$5.4 billion, to a new total of US$1.265 trillion. Japan was another seller, who divested US$14 billion, making its new total holdings at US$1.114 trillion.

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