The world’s second-largest economy has been steadily shedding hundreds of billions of dollars worth of US government-backed securities for more than a decade.
New figures from the US Treasury Department show that China’s holdings of Treasury bonds have reached a low not seen in more than 14 years.
China was gradually accumulating US Treasuries until May 2013, when its stockpiles reached higher levels. receipt All-time high of $1.297 trillion.
Since then, the BRICS nation has been steadily liquidating its holdings of Treasuries. Exfoliation Its ownership has fallen to $805.4 billion as of August 2023 – a decline of more than $491 billion from the peak.
China’s quiet distribution of its holdings of Treasury bonds comes at a time when a major rating agency lowered its outlook on US debt.
Friday Moody’s change The outlook for the country’s credit rating ranges from stable to negative. According to Moody’s, this step is due to the country’s weak financial situation and internal political conflict in Washington.
“In a context of high interest rates, and without effective fiscal policy measures to reduce government spending or raise revenues, Moody’s expects the US fiscal deficit to remain very large, significantly weakening debt sustainability.”
Lowering the country’s debt outlook does not necessarily mean that Moody’s will lower the country’s credit rating, but the agency says the odds of this happening in the future have increased.
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