China increased its holdings of U.S. Treasuries for the fourth month in a row, an indication that the country is rebuilding its forex reserves as the yuan finds its footing.
Ranked as the second-biggest holder of Treasuries, China held $1.10 trillion in May, marking a $10 billion increase from the previous month, according to the latest Treasury Department data published. Japan remained as the biggest holder owning $1.11 trillion, slightly higher compared to its total holdings in April.
The two nations account for over one-third of total foreign ownership of Treasuries, which has risen by $49.9 billion in May to $6.12 trillion, the figures indicated. Out of the stated total, $3.95 trillion were government holdings.
China’s forex reserves rose for the fifth consecutive month in June as the yuan stabilized and investors were less enthusiastic to move money out of the country. Tighter capital controls and the steadying yuan this year has weakened outflow pressures as policy makers encourage foreign investors to put more money into the country.
The material has been provided by InstaForex Company – www.instaforex.com
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