Several members of the economic alliance known as BRICS are throwing away billions of dollars in assets backed by the US government.
New figures from the Ministry of Finance show that China is leading the way. Reduce its holdings of US government bonds rose from $835.4 billion in June to $821.8 billion in July – a drop of $13.6 billion in one month.
While still the world’s second-largest foreign holder of U.S. government bonds, China has now canceled a total of $117.4 billion in U.S. government debt in a 12-month period.
Looking at Brazil, the South American country has reduced its holdings of US government bonds from $227.4 billion in June to $224.7 billion in July, a drop of about $2.7 billion.
India also reduced its US government bonds to $2.3 billion during the same period.
Meanwhile, oil-rich country the United Arab Emirates saw its U.S. Treasury stock fall by $300 million, from $65.2 billion in June to $64.9 billion in July.
According to a recent report from Nikkei Asia, China is trim its US Treasury to defend the yuan against a strong US dollar. This month, the Chinese yuan (CNY) fell to $0.136 against the US dollar, a level last seen in January 2008.
When a country sells U.S. Treasury bonds, the billions of dollars raised from the sale can serve as capital for the country’s central bank to accumulate the local currency on the open market in an effort to increase its value.
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