WASHINGTON – China reduced its holdings of U.S. Treasury debt in May as total foreign holdings of government debt posted a slight increase.
China's holdings fell by $32.5 billion to $867.7 billion, the Treasury reported Friday. Total foreign holdings edged up $5.8 billion to $3.96 trillion.
The report said that total holdings of Treasury securities edged up a small 0.1 percent to $3.29 trillion in May.
The Treasury said that net purchases of long-term securities, a category that covers not only U.S. government debt but also debt of U.S. companies, increased by $35.4 billion in May. That followed bigger gains of $81.5 billion in April and $141.4 billion in March.
While the May figure was down from the previous two months, analysts said it still reflected significant interest on the part of foreigners in holding U.S. government and corporate debt.
That demand has been spurred in recent months by a debt crisis in Europe that has prompted a flight to safety. U.S. Treasury securities are considered the safest investment in the world because the U.S. government has never defaulted on its debt.
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