Bourse

Home page

Bourse

Foreign central banks sell a record $343 billion in US treasuries

19 September 2016 16:03 (UTC +04:00)

Baku - APA-Economics. Foreign central banks accelerated their liquidation of US paper held in the Fed's custody account, which tumbled by $27.5 billion in the past week, the biggest weekly drop since January 2015, Zero Hedge reported.

What until a month ago was "merely" a record $335 billion in central bank sales in the LTM period ending June 30, one month later, this number has risen to a new all time high $343.4 billion, or well over a third of a trillion in Treasuries sold in the past 12 months.

Among the biggest sellers if on a market-price basis, not surprisingly, was China, which in July "sold" $22 billion in US paper (the number is different - the tracked total shows, bringing its total to $1.219 trillion, the lowest total since 2012.

What is becoming increasingly obvious, is that both foreign central banks, sovereign wealth funds, reserve managers, and virtually every other official institution in possession of US paper, is liquidating it at a never before seen pace. In some cases, like China, this is to offset devaluation pressure; in others such as Saudi Arabia, it is to provide the funds needed to offset the collapse of the petrodollar, and to backstop the country's soaring budget deficit.