China and Saudi Arabia, members of the BRICS, are dumping hundreds of billions of dollars of US Treasuries.
New figures from the Treasury Department show that China reduced its holdings of US Treasuries from $938.8 billion in June 2022 to $835.4 billion in June 2023, a decrease of about 103.4 billion dollars in just 12 months.
Even though China has gotten rid of US Treasuries over the past year, it remains one of the largest creditors to the United States, after Japan which holds $1.105 billion.
As for Saudi Arabia, a new member of the BRICS, the Middle Eastern country reduced its holdings of US debt by $11.1 billion over the same period, from $119.2 billion to 108, $1 billion.
The shrinking holdings of US bonds from both BRICS countries is a further sign of opposition to US dollar hegemony.
Ziad Daoud, Bloomberg’s chief emerging markets economist, says Saudi Arabia’s move into riskier assets could influence the Federal Reserve’s stance on interest rates.
“At the national level, higher risks mean potential losses for the kingdom. Globally, the reallocation of Saudi wealth could lead to higher US interest rates. »
As China and Saudi Arabia sold US Treasuries, other BRICS countries increased their holdings.
India accumulated $26.6 billion of US debt securities between June 2022 and June 2023. The United Arab Emirates and Brazil added $25.1 billion and $1.3 billion, respectively, to their holdings of US Treasury securities over the 12-month period.
