Posted on 03/19/2016 3:22:48 PM PDT by Lorianne
In a bid to raise cash, foreign central banks and government institutions sold $57.2 billion of U.S. Treasury debt and other notes in January, according to figures released on Tuesday. That is up from $48 billion in December and the highest monthly tally on record going back to 1978.
It's part of a broader trend that gathered steam last year when central banks sold a record $225 billion of U.S. debt.
"Foreigners have no longer been our BFF when it comes to buying U.S. Treasuries," Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a client note.
So what are foreign central bankers doing with these piles of cash? They're mostly using the funds to stimulate their own economies as the global growth slowdown and crash in oil prices continue to take their toll.
For instance, China has been liquidating its holdings of foreign debt to pump money into its slowing economy, plummeting currency and extremely volatile stock market. China, the largest owner of U.S. debt, trimmed its Treasury holdings by $8.2 billion in January, the Treasury Department said. The actual decline was likely larger considering China reported selling $100 billion of foreign-exchange reserves in January.
(Excerpt) Read more at money.cnn.com ...
Trading Treasuries for dollars, then paying debts in dollars, versus converting a native currency to dollars at an unfavorable exchange rate?
Gotcha’. Shouldn’t that make the dollar go up?
I’m pretty sure we said the same thing. I just used fewer words. Oh and i don’t hate banking or bankers being as i’ve worked in finance for 38 years.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.