Foreign holdings of US Treasuries hit record in September

By Alden Bentley

NEW YORK, Nov 18 (Reuters) - Foreign holdings of U.S. Treasuries increased for the fifth straight month in September and reached a record, data from the Treasury Department showed on Monday.

Holdings of U.S. Treasuries by foreigners rose to $8.673 trillion from $8.503 trillion in August. They were up 15.4% from total holdings of $7.515 trillion a year earlier.

The benchmark 10-year Treasury yield started September at 3.928% and ended the month at 3.802%, a decline of 12.6 basis points. U.S. Treasury yields came down during the month as the Federal Reserve began to let up on a tight monetary policy in place from March 2022 to July 2023, by lowering interest rates by 50 bps on Sept. 18.

Treasury International Capital data further showed that while Japan remained the largest non-U.S. owner of Treasuries, its holdings eased to $1.123 trillion from $1.129 trillion in August.

China's pile of Treasuries, the second largest, fell for a third consecutive month to $772 billion. Treasury holdings by the world's second largest economy hit a record high of $1.315 trillion in June 2011.

On a transaction basis, U.S. Treasuries posted foreign inflows of $77 billion, compared with $19.2 billion in August.

The Treasury Department reported that the sum total in September of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net capital inflow of $398.4 billion. Of this, net foreign private inflows were $341.1 billion, and net foreign official inflows were $57.3 billion.

U.S. residents increased their holdings of long-term foreign securities, with net purchases of $47.1 billion, the Treasury Department said. (Editing by Jonathan Oatis)