Foreign central banks were net sellers of US obligations in the week ending September 12. Heavy dumping of treasuries was partly offset by pretty robust buying of agencies. The trend by central banks to sell US paper has now extended to about two months.

Once again, the regular Reuters summary does not appear to have been posted. UPDATE: twist has found the missing Reuters summary [35a] although for some reason it is still not showing up when I search Google News with |"agency debt"|, even though the text is right there in the article.  Thanks twist, once more, for the updated chart and graph.

The Fed said its holdings of Treasury and agency debt kept for overseas central banks fell $3.355 billion in the week ended September 12, to stand at a total of $1.98 trillion.

The breakdown of custody holdings showed overseas central banks sold $6.970 billion in Treasury debt to stand at a total $1.203 trillion.

The foreign institutions bought securities from government-sponsored agencies like Fannie Mae and Freddie Mac, adding $3.616 billion to their holdings, to stand at a total $774.4 billion.

The updated chart and graph are derived from the new Fed report.[35]

 

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Notes and References

[35]: "Federal Reserve Statistical Release H.4.1 Factors Affecting Reserve Balances"

September 6th report
Memo (off-balance-sheet items):
Marketable securities held in custody for foreign
official and international accounts(2,7) 1,980,195 + 842 + 299,823 1,981,271
U.S. Treasury 1,207,179 + 1,807 + 62,532 1,210,459
Federal agency 773,016 – 965 + 237,291 770,811
Securities lent to dealers 5,886 + 618 + 2,587 7,170

September 13th report
Memo (off-balance-sheet items):
Marketable securities held in custody for foreign official and international accounts(2,7) 1,981,321 + 1,126 + 299,191 1,977,916
U.S. Treasury 1,207,142 – 37 + 59,493 1,203,489
Federal agency 774,180 + 1,164 + 239,699 774,427
Securities lent to dealers 5,519 – 367 + 1,623 3,258

1,977,916 – 1,981,271 == -3,355

1,203,489 – 1,210,459 == -6,970

774,427 – 770,811 == 3,616

 

[35a]: "Foreign central banks net sellers of U.S. Treasuries – Fed", Reuters, September 13, 2007.

Foreign central banks were net sellers of U.S. Treasuries last week, Federal Reserve data showed on Thursday.

The Fed said its holdings of Treasury and agency debt kept for overseas central banks fell $3.36 billion in the week ended Sept. 12, to stand at a total of $1.98 trillion.

The breakdown of custody holdings showed overseas central banks sold $6.97 billion in Treasury debt to stand at a total $1.20 trillion.

However, the foreign institutions bought securities from government-sponsored agencies like Fannie Mae and Freddie Mac, adding $3.62 billion to their holdings, to stand at a total $774.43 billion.