Foreign holdings of US Treasury debt down for 3rd month

WASHINGTON – Foreign holdings of U.S. Treasury securities fell for a third straight month in September as China and Japan, the two biggest foreign owners of Treasury debt, both trimmed their portfolios.

The Treasury Department said Wednesday that total foreign holdings dropped 0.7 per cent to $6.15 trillion in September, following a 0.8 per cent decline in August and a 0.5 per cent decline in July.

China, the top foreign holder of Treasury debt, reduced its holdings 2.4 per cent to $1.16 trillion in September. It marked the fourth straight month that China has cut back.

The Congressional Budget Office is projecting that the national debt, now at $19.8 trillion, will increase by $8.6 trillion over the next decade, underscoring America’s need to maintain high foreign demand for rising levels of Treasury debt.

Japan, the second largest foreign holder of Treasury debt, reduced its holdings by 0.7 per cent in September to $1.14 trillion. But Ireland, No. 3 in the rankings, increased its holdings of Treasury securities by 1.7 per cent to $270.9 billion.

China has cut its holdings of U.S. debt in nine of the past 12 months. Those holdings are now 8 per cent lower than they were a year ago.