May Net Foreign Sales Of Long-Term US Securities $37.2 Billion
July 16 2009 - 9:36AM
Dow Jones News
Net foreign sales of long-maturity U.S. securities totaled $37.2
billion in May, following sales of $8.5 billion the month before,
according to a U.S. Treasury Department report released
Thursday.
The monthly Treasury report highlights cross-border acquisitions
of securities with maturities of more than one year including
non-market transactions such as stock swaps and principal repayment
on asset-backed securities.
The closely-watched figure, excluding transactions that don't
occur on an open market, recorded net sales of $19.8 billion in
long-term U.S. securities, after purchases of $11.5 billion in
April, according to the monthly Treasury International Capital
report, known as TIC.
The report's most comprehensive category, "monthly net TIC
flows," includes non-market flows, short-term securities and
changes in banks' dollar holdings. This measure of net foreign
capital outflow was $66.6 billion in May, versus an outflow of
$38.0 billion the previous month.
Financial market analysts consider the monthly data from the
Treasury Department to be a significant but imprecise gauge of how
easily the U.S. can finance its trade deficit. The May TIC flow
compares with the $25.96 billion trade deficit during the
month.
Within the long-term securities category, foreign net sales of
U.S. Treasury notes and bonds totaled $22.55 billion in May,
compared with net purchases of $41.89 billion the month before.
Private foreign investors sold a net $343 million in Treasury
notes and bonds in May, after buying $24.79 billion in April.
Meanwhile, foreign official institutions such as central banks sold
a net $21.76 billion of these Treasurys, compared with net
purchases of $17.13 billion the month before.
Net foreign purchases of debt issued by U.S.
government-sponsored agencies like Fannie Mae and Freddie Mac
totaled $12.81 billion in May, compared with sales of $2.48 billion
in April.
For U.S. equities, net foreign purchases totaled $16.73 billion
in May, compared with purchases of $4.58 billion the previous
month.
For corporate bonds, net foreign purchases were $935 million,
versus sales totaling $9.73 billion the previous month.
China remained the largest holder of U.S. Treasury securities,
having surpassed Japan late last year. China increased its holdings
to $801.5 billion in May. Japan, the second-largest holder of U.S.
Treasurys, decreased its holdings to $677.2 billion.
The TICs data, typically released around the 11th business day
of the month, can be found on the Treasury's Web site at:
http://www.treas.gov/tic. With each monthly release, Treasury
revises the previous month's data as well.
The next report, covering June, is scheduled for release on Aug
17.
-By Meena Thiruvengadam, Dow Jones Newswires; 202-862-9275;
Meena.Thiruvengadam@DowJones.com