An employee arranges genuine bundles of U.S. one-hundred dollar banknotes and Chinese one-hundred yuan. (Photographer: SeongJoon Cho/Bloomberg)

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

(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.

©2017 Bloomberg L.P.