Reserve Bank of India (RBI) has sold US treasury (USTs) bonds worth $16.3 billion
As the United States trade war with China keeps pace, the country sold $3 billion in US Treasury bonds, making it the third sale in the last 14 years.
Following suit, the Reserve Bank of India (RBI) has sold US treasury (USTs) bonds worth $16.3 billion since April as the country’s stock plummeted to $140 billion during Agust, The Economic Times reported.
The sale came as RBI made efforts to tackle the increasing slide of the rupee and “trim” it’s holding of US Treasuries as the RBI “joins many other emerging economies which have been selling off US bonds amid rising [interest] rates.”
On Saturday Neon Nettle reported Russia and China are both moving to bypass the US by dropping the dollar for bilateral trades.
According to Sputnik: The Indian rupee dissipated more than 10 percent of its value against the dollar after foreign portfolio investors (FPI) drew out more than $10 billion in investments in the Indian markets since April.
In this vein, a release by Bank of America Merrill Lynch predicted that “if FPI flows do not revive amid a US-China trade war, the RBI may need to sell another $10-15 billion by March.”
In mid-October, Beijing sold $3 billion of sovereign dollar bonds in the face of the ongoing US-China trade spat, in a move that Bloomberg reported as “an even bigger demonstration of China’s pull in the international bond market.”
Ziyun Wang, partner, and senior portfolio manager at DeepBlue Global Investment Ltd, for his part, claimed that “the bond issuance is more like a vote of confidence in China’s creditworthiness.”
US Treasury Secretary Steve Mnuchin, in turn, stated that he is not “losing any sleep” over the prospect of China selling its stockpile of US government bonds.
Earlier, the US Treasury Department said in a report that in May, Russia sold $33.8 billion of its US Treasury bonds and is no longer amongst the 33 biggest holders of such securities.
By contrast, in 2017 Russia boosted its Treasury bond holdings from almost $70 billion in March to more than $92 billion in December.
China remains the main holder of US Treasury bonds, with its holdings amounting to more than $1.18 trillion.
Japan is second, controlling more than $1.04 trillion.