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Foreign holdings of US Treasury securities fall 0.9 per cent in October to $6.05 trillion

WASHINGTON – Foreign holdings of U.S. Treasury securities fell in October for the third time in the past four months as both China and Japan, the two largest owners of Treasury debt, trimmed their holdings.

The Treasury Department reported Tuesday that U.S. holdings dipped 0.9 per cent to $6.05 trillion after a small 0.1 per cent rise in September. Foreigner ownership of Treasury debt is down 2.7 per cent from a record high of $6.22 trillion set in January.

For October, China, the No. 1 owner of Treasury debt, reduced its holdings by 0.3 per cent to $1.25 trillion. Japan, the No. 2 holder of Treasury debt, cut its holdings by 2.3 per cent to $1.15 trillion.

Congress has suspended the government’s borrowing limit until March 2017, allowing Treasury to keep borrowing what is needed to run the government. That deal was brokered by former House Speaker John Boehner before he left Congress last month. The deal removes the threat of an unprecedented default on the government’s debt until early 2017 when a new president will be in office.

The largest part of foreign holdings are owned by other governments, primarily central banks. These foreign official holdings fell 1.1 per cent to $4.10 trillion in October but still made up 68 per cent of total foreign holdings.