Saudi Arabia’s US Treasury holdings declined by $10.6 billion to $126.9 billion in January, marking a 7.71% month-on-month decrease. The Kingdom maintains its 17th position among the largest holders of US Treasury securities, and Japan retains the top spot with $1.07 trillion. The report highlights shifts in foreign investment patterns amidst global economic conditions.
Saudi Arabia’s holdings in US Treasury securities decreased by $10.6 billion to $126.9 billion in January, a 7.71 percent decline compared to December. This adjustment may indicate market fluctuations or portfolio rebalancing amid changing global economic conditions. Despite the decrease, Saudi Arabia remains the 17th largest holder of US Treasury securities and is the only country from the Gulf Cooperation Council within the top 20 holders.
In a report from the US Department of the Treasury, it was noted that January experienced a net Treasury International Capital (TIC) outflow of $48.8 billion, attributable to net foreign private outflows of $74.8 billion and net foreign official inflows of $26.0 billion. Interestingly, Saudi Arabia’s holdings had increased by 1.4 percent in December compared to November.
The composition of Saudi Arabia’s portfolio consists of approximately $105.3 billion in long-term bonds, which constitutes 83 percent of its total holdings, while short-term bonds amount to $21.6 billion, accounting for 17 percent. Furthermore, the report highlighted that foreign residents increased their investment in long-term US securities by $200 million, with private investors contributing $59.2 billion and foreign official institutions recording significant net sales of $59 billion.
Additionally, US residents also raised their holdings of long-term foreign securities, with net purchases reaching $45.4 billion. Notably, foreign residents increased their US Treasury bill holdings by $32.3 billion, leading to a total increase of $53.9 billion in dollar-denominated short-term US securities. However, banks’ net dollar-denominated liabilities to foreign residents dropped significantly by $57.5 billion.
As for the top holders of US Treasury bonds, Japan retained its leading position with $1.07 trillion, reflecting a 1.9 percent increase from December. China followed in second with $760.8 billion, while the UK held $740.2 billion. Luxembourg and the Cayman Islands ranked fourth and fifth respectively, with holdings of $409.9 billion and $404.5 billion. Other significant holders include Belgium, Canada, France, Ireland, Switzerland, Taiwan, Hong Kong, Singapore, India, Brazil, and Norway, reflecting a diverse international interest in US Treasury securities.
In summary, Saudi Arabia has experienced a notable decline in its US Treasury holdings, continuing to position it among the largest holders globally. The report indicates an ongoing trend of global portfolio adjustments and responses to economic changes. With significant issuances from countries such as Japan and China, the global landscape of US Treasury investors remains dynamic and multifaceted.
Original Source: www.arabnews.com
