Foreigners in July increased purchases of US long-term assets, including government bonds and stocks, the US Treasury said on Tuesday. Overseas investors bought $67 billion in long-term assets after buying $9.3 billion in June. Demand for long-term Treasury debt among private and government accounts rose. Foreigners bought $50 billion in July, up from $32.4 billion in June.
China, the largest foreign US creditor, increased its Treasury holdings by $2.6 billion to $1.115 trillion, the first monthly increase since April. Switzerland added $18.3 billion in Treasuries, the biggest increase among major foreign holders. Analysts said the rise in central bank buying was tied partly to efforts to manage domestic exchange rates and keep local currencies from rising too swiftly against the dollar.
Over the last 12 months, however, China has reduced its stash of US government bonds by 12.6 percent. During this time, it has allowed more currency appreciation in an effort to reduce inflation and encourage more domestic consumption. Private investors snapped up some $6 billion in stocks in July after selling $7.2 billion the prior month. Including overseas official accounts, US stocks attracted a net inflow of $6.4 billion in March. Including short-dated assets such as bills, foreigners added $73.7 billion in July, up from a downwardly revised inflow of $15.1 billion the prior month.
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