China Dumps The Largest US Treasuries in History

China’s recent move to sell off a significant amount of US Treasuries and agency debt bonds, totaling a staggering $53.3 billion, represents the largest sell-off ever initiated by the country. This sell-off occurred during the first quarter of 2024, coinciding with a decline in the value of the US dollar to a one-month low of 104.20.

China, along with other members of BRICS and other developing nations, has been progressively divesting from US treasuries since 2022, with China leading in terms of the amount sold. This trend reflects a growing desire among BRICS and other developing countries to reduce their reliance on US assets in their reserve holdings.

In a similar vein, Belgium, a traditionally strong ally of the US, also chose to divest from US treasuries, selling $22 billion during the same period. This can be seen as an indication that even European countries are beginning to distance themselves from the US economy and its associated bonds and treasuries.

The primary motivating factor behind this move can be traced back to concerns over the US’s unabated debt, which currently stands at a worrisome $34.4 trillion. Consequentially, BRICS has opted to rely more on local currencies, rather than the US dollar, in an effort to mitigate its exposure to these mounting debt levels.