According to the latest data released by the US Department of Treasury, China remains the largest foreign investor in US treasury securities. As of September 2009, China holds $798.90B of US treasuries. Japan is the second largest investor at $751.50B followed by the UK at $249.3B.
The top 10 foreign holders of US Treasury securities with year to date changes are shown below:
(amount in billions of US dollar)
|S.No.||Country||Jan,2009||Sept,2009||YTD Change %|
|5||Caribbean Banking Centers||176.6||171.7||-2.85%|
Note: Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.
Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, British Virgin Islands and Panama.
Source: US Department of Treasury
China has increased its investment in US treasuries by about 8% since the beginning of the year. It is interesting to see that the UK and Hong Kong have increased their investments significantly this year. UK increased its holdings by 50.30% and Hong Kong raised it by nearly 46%. Russian investment in US treasuries is mostly flat this year.
Among the BRIC countries, India has the lowest US treasury holdings at $35.9B. The foreign exchange reserves for BRIC countries as of September this year are:
Brazil = $224 Billion
India = $280.34 Billion
The Ratio of US Treasuries to Foreign Exchange Reserves for each country is as follows:
Brazil = 64.63%
Russia = 29.46%
China = 35.15%
India = 12.81%
From the above, we can infer that Brazil has the highest exposure to US treasuries and India has the lowest exposure at just 12.81%. The vulnerability ratio is high for China also since the ratio stands at 35.15%. With the US dollar on a downward spiral everyday Brazil, China and Russia will be adversely affected more than India. While in one way Russia, Brazil and China’s holdings show their confidence in the US, it may me wise for them to reduce their US treasury holdings now and diversify into other investments.
For the complete listing of Major Foreign Holders of US Treasury Securities as of September, go here.