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News Link • Government Debt & Financing

China’s Treasury Holdings Climb to Record in Government Data

•, By Ian Katz
 The figures, scheduled for release at 9 a.m. tomorrow in Washington, were inadvertently posted on the Treasury’s website. Japan’s holdings rose $12 billion to $1.186 trillion, the figures showed.

China’s swelling foreign-exchange reserves, reported today to have reached a world record $3.82 trillion at the end of December, may sustain the nation’s appetite for U.S. debt. Capital inflows and intervention to limit gains in the yuan have contributed to China building up currency holdings that are a third of the global total.

“Large interest-rate differential and steady appreciation of the renminbi contributed to large arbitrage inflows into China, a situation made all the more easy with China’s increasing financial integration and renminbi internationalization,” UBS AG Hong Kong-based economist Wang Tao wrote in a report on China’s data.

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