Amid geopolitical uncertainty, China trims US Treasury holdings to 18-year low
Overall foreign holdings of US Treasuries climbed to US$9.353 trillion in April
China trimmed its holdings of US Treasuries to an 18-year low in April as it continued to diversify its foreign reserves amid heightened geopolitical tensions and growing concerns over the independence of the US Federal Reserve.
Data released by the US Treasury Department on Thursday showed that Chinese investors’ US Treasury holdings fell from US$652.3 billion in March to US$651.1 billion in April, the lowest level since September 2008, based on figures compiled by financial data provider Wind.
Overall foreign holdings of US Treasuries climbed to US$9.353 trillion in April from US$9.349 trillion a month earlier, with increases from several major holders including Japan and the United Kingdom.
In April, the US-Israel war on Iran entered a fragile phase as ceasefire violations and stalled negotiations cast doubt on prospects for a lasting settlement, adding to concerns over global stagflation pressures.
Concerns over the Federal Reserve’s independence also deepened that month, with Kevin Warsh in line to take the helm of the US central bank. While he provided assurances during his April 21 confirmation hearing that he would “absolutely not” become the US president’s “human sock puppet”, investors remained wary of potential political influence over interest-rate decisions.