Saudi Arabia’s US Treasury Holdings Decrease by $10.6 Billion in January
In January, Saudi Arabia’s US Treasury securities totaled $126.9 billion, down $10.6 billion from December, marking a 7.71% decline. It ranked 17th among global holders, with a predominance in long-term bonds. Japan and China lead in overall Treasury holdings, showing varied investment trends across nations.
Saudi Arabia’s US Treasury securities amounted to $126.9 billion in January, representing a $10.6 billion decrease from December. This decline translates to a 7.71 percent month-on-month drop, which may reflect market changes or adjustments in investment strategy as the Kingdom adapts to global economic situations. As of January, Saudi Arabia maintained its ranking of 17th among the largest holders of US Treasury securities and remains the only Gulf Cooperation Council (GCC) nation in the top 20.
According to the US Department of the Treasury, the aggregate of all net foreign acquisitions of long-term and short-term US securities resulted in a net TIC (Treasury International Capital) outflow of $48.8 billion in January. The breakdown indicated that net foreign private outflows were recorded at $74.8 billion, while net foreign official inflows amounted to $26.0 billion. The Kingdom’s holdings had previously increased by 1.4 percent in December in comparison to November.
Saudi Arabia’s portfolio comprises $105.3 billion in long-term bonds, accounting for 83 percent of its total Treasury investments, and $21.6 billion in short-term securities, representing the remaining 17 percent. Foreign residents collectively increased their long-term US securities holdings by $200 million overall, with private investors acquiring $59.2 billion, while foreign official entities reported net sales of $59 billion. Conversely, US residents also raised their long-term foreign securities holdings by a net purchase of $45.4 billion.
Moreover, foreign residents expanded their US Treasury bill assets by $32.3 billion, contributing to an overall increase of $53.9 billion in short-term dollar-denominated US securities. In contrast, banks’ net dollar-denominated liabilities to foreign residents diminished by $57.5 billion.
In terms of overall holders of US Treasury bonds, Japan maintained its position as the largest investor with holdings amounting to $1.07 trillion, a rise of 1.9 percent from December. China, Japan’s foremost competitor, occupied the second position with $760.8 billion, while the United Kingdom ranked third with $740.2 billion. Luxembourg and the Cayman Islands followed in fourth and fifth places, holding $409.9 billion and $404.5 billion, respectively. Other significant holders include Belgium, Canada, and France, with substantial portfolios in US Treasury securities.
In conclusion, Saudi Arabia’s adjustments in its US Treasury holdings highlight the dynamic nature of investment strategies in response to global economic conditions. While a notable decrease of $10.6 billion was recorded, the Kingdom continues to maintain its significant position among global investors. Furthermore, the overall landscape of US Treasury bondholders remains robust, with various countries demonstrating varying investment levels, thereby underscoring the importance of international financial dynamics.
Original Source: www.arabnews.com
