As the vast majority of the global economy was shut down in response to the severity of the coronavirus pandemic, foreign holdings of US government debt declined to a new low for the month of April.
Foreign sales of treasuries declined from $299 billion in the month of March to $177 billion in April. Although foreign countries still purchased $10.9 billion worth of corporate bonds, they conversely ended up selling $5.6 billion of those corporate stocks in April. Saudi Arabia has dumped the most US Treasuries, with a total of $60 billion sold between March and April. In the meantime, Japan and China have followed Saudi Arabia and also reduced their holdings of US government debt by $5.7 billion and $8.8 billion, respectively.
There is one interesting observation amidst all of this, however. The world’s gold holdings have been steadily increasing in the meantime. It appears that many foreign governments are opting for a less volatile store of value.
Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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