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The US Treasury Department on September 16 published its latest Treasury International Capital data that documented a $10.7 billion expansion in Saudi Arabia’s holdings of US Treasury securities during July. The report positioned Saudi Arabia as the leading holder of such assets in the Middle East. The department’s statistics are derived from reports filed by US banks and financial institutions that act as custodians for foreign investors.
This gain in July followed incremental increases in preceding months that had already lifted the Kingdom’s position from levels seen earlier in the year, the US Treasury Department figures indicated. Saudi Arabia held the 17th spot among the world’s largest foreign holders of US Treasuries in recent rankings by the department. The data underscored the Kingdom’s ongoing engagement with US capital markets as part of its reserve management strategy.
Overall foreign holdings of US Treasuries attained a new peak of $9.159 trillion in July, an advance from the prior month, according to the US Treasury Department. The department noted that this marked the third successive month in which foreign ownership set a record. Japan led all foreign holders with $1.15 trillion while the United Kingdom and France also registered gains that offset reductions by China.
The Saudi Arabian Monetary Authority separately reported that the country’s official reserve assets expanded to SR1.85 trillion, or roughly $494.55 billion, by the end of June. These reserves incorporate the US Treasury positions along with gold, foreign exchange and positions at the International Monetary Fund. The authority’s data illustrated a pattern of reserve accumulation that has provided a buffer against volatility in energy markets.
US Treasury securities are widely regarded as a core safe-haven investment for central banks and sovereign wealth funds around the world, the department’s background on the TIC system explained. Foreign official institutions accounted for a substantial share of net purchases in the period covered by the July statistics. The monthly TIC release offers policymakers and analysts a window into global capital movements that influence exchange rates and interest rate expectations.
In the Gulf region the UAE similarly expanded its US Treasury portfolio by more than 10 percent from the previous month to $107.8 billion, the US Treasury Department data showed. The combined holdings of the two largest Gulf economies highlighted the area’s importance in the global market for US government debt. The department cautioned that custody arrangements can sometimes obscure the true nationality of the ultimate investor in these instruments.
