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China Holdings of U.S. Treasuries Rise Amid Buildup in Reserves

China remains the biggest foreign holder of U.S. Treasuries, ahead of Japan. 

China Holdings of U.S. Treasuries Rise Amid Buildup in Reserves
An employee arranges genuine bundles of U.S. one-hundred dollar banknotes and Chinese one-hundred yuan. (Photographer: SeongJoon Cho/Bloomberg)

(Bloomberg) -- China’s holdings of U.S. Treasuries rose in October as the world’s second-biggest economy rebuilds its currency reserves.

China’s holdings of U.S. bonds, notes and bills increased by $8.4 billion to $1.19 trillion, according to Treasury Department data released Friday in Washington. China remains the biggest foreign holder of U.S. Treasuries, ahead of Japan, which owned $1.09 trillion, down by $2.1 billion from September. That was the third straight month of declines.

The two countries account for more than a third of all foreign ownership of Treasuries, which gained by $26.4 billion to a record $6.35 trillion in October, the figures showed.

China’s foreign-exchange reserves rose for a 10 month to $3.12 trillion in November. The country’s capital outflows have eased amid tighter controls, helping steady the currency. The yuan has gained about 5 percent against the greenback this year, rebounding from a loss of some 6.5 percent last year.

The Treasury report, which also contains data on international capital flows, showed a net inflow of long-term securities of $23.2 billion after $80.9 billion in September. It showed a total cross-border inflow, including short-term securities such as Treasury bills and stock swaps, of $151.2 billion following outflows of $42.6 billion the prior month.

--With assistance from Andrew Mayeda

To contact the reporter on this story: Randall Woods in Washington at rwoods13@bloomberg.net.

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Sarah McGregor

©2017 Bloomberg L.P.