BRICS: China Dumped $48.9 Billion in US Treasuries in Quarter 1
BRICS member China is on a US treasuries and agency bonds dumping spree and offloaded billions worth of assets. The latest data from the US Treasury Department shows that China has trimmed its holdings from $816.3 billion in December to $767.4 billion in March this year. That’s a reduction of $48.9 billion during just the first quarter of 2024.
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In addition, BRICS member China has sold another $25.1 billion during the Q2 of 2024. In total, China has offloaded $72 billion worth of US treasuries and agency bonds in the last seven months alone. Reports suggest that China is diversifying its assets and purchasing tonnes of gold to its central bank reserves.
The World Gold Council reported that China and other BRICS countries have been the largest buyers of gold since late 2022. The gold accumulation began when BRICS kick-started the de-dollarization agenda to challenge the US dollar’s global supremacy. If other developing countries start following the BRICS agenda and dump treasuries, the US economy will be the hardest hit.
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BRICS: Why Is China Dumping Us Treasuries & Agency Bonds?
Stephen Chiu, the chief Asia foreign exchange and rates strategist at Bloomberg Intelligence said that BRICS member China has a “clear intention” to diversify from the US dollar. “As China is selling both despite the fact that we are closer to a Fed rate-cut cycle, there should be a clear intention of diversifying away from US dollar holdings,” he said.
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The development also indicates that BRICS members and other developing countries don’t find the US treasuries lucrative. Therefore, are heavily investing in gold and other assets and staying away from the dollar, treasuries, and the US economy. We will have to wait and watch if China and other BRICS countries will offload further US treasuries during the second half of 2024.