India's exposure to US govt securities touches $83 bn in December

Touching a one-year high, India’s exposure to US Government securities stood at $83 billion in December, amid the world’s largest economy seeing signs of recovery.

India, one of the significant holders of securities issued by the US Treasury Department, has been increasing its exposure intermittently during the last year. In December 2013, the country’s exposure was worth only $68.5 billion.

Neighbouring China remained the largest holder of such securities with exposure worth over $1.24 trillion at the end of December last year. However, it was lower than $1.25 trillion seen in November.

Latest data from the Treasury Department shows that India’s holdings rose to $83 billion in December, an increase of $2.5 billion compared to the previous month. In November last year, the exposure touched $80.5 billion.

India has been hiking its holdings since October 2014 when the same stood at $77.5 billion.

Among the BRIC nations, India has the least exposure to US government bonds. At the end of December, after China, Brazil had the maximum exposure at $255.8 billion followed by Russia with holdings worth $86 billion.

In the three months ended December, the American economy grew 2.6 per cent, according to the latest estimate from the US Bureau of Economic Analysis.

“The sum total in December of all net foreign acquisitions of long-term securities, short-term US securities, and banking flows was a monthly net Treasury International Capital (TIC) outflow of $174.8 billion.

“Of this, net foreign private outflows were $143.7 billion, and net foreign official outflows were $31.1 billion,” the Treasury Department said in a recent statement.

Foreign residents increased their holdings of its bills by $24.8 billion in December. Foreign resident holdings of all dollar-denominated short-term US securities and other custody liabilities increased by $10.1 billion, it added.

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