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China's Reduced U.S. Treasury Holdings Not De-Dollarization-Yicai

CHINA PRESS
MNI (Singapore)

China’s declining holdings of U.S. Treasury bonds are a precautionary measure to deal with the expected adjustments of cross-border U.S. dollar liquidity following the Fed rate hikes, not a move to de-dollarize, said Yicai.com in an editorial. In the past six months to May this year, China has reduced U.S. Treasury holdings by over USD100 billion, which is the first time since May 2010 that the holdings have fallen below USD1 trillion, the newspaper said. U.S. Treasuries act as risk-averse assets and accounted for 32% of China’s foreign exchange reserves by end-June, and there is a need to increase the portfolio of profitable assets, the newspaper said.

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