28.05.2024

Turkey after Russia gets rid of US government bonds

After Russia just two months got rid of the main part of its stockpile of US government bonds, many analysts have wondered: is not this a kind of rehearsal for what could happen if/when China will start dumping its existing Treasury bonds of the United States?

It turned out, Russia actually beat a track… but not for China. Putin’s “workaround” was to follow the victim of the us sanctions on Turkey.

According to the Treasury in June, Turkey came out of the list of major holders of US government bonds (the principal holders are those who hold bonds in the amount of $30 billion).

From the end of 2017 stocks owned by the Turkish American securities fell by 52%, a decrease from $32.6 billion in may to $28.8 billion in June this year. The maximum was recorded in November 2016 and totaled $61,2 billion.

Last month, Russia also is not among the major holders of US treasuries. Reserves of Russia have reached an 11-year low and amounted to only $14.9 billion.

Sale of the securities began even before tensions between the US, Turkey and Russia led to the launch of a new package of fees and sanctions. Last week the administration of U.S. President Donald trump has imposed new sanctions against Russia “in the sentence on the poisoning of former Russian agent Sergei Skripal and his daughter Julia”.

Meanwhile, in July and August, the Turks continued to sell treasuries because of the decision of the President of the trump double the tariffs on steel and aluminium to exert pressure on Turkey for the incident with an American pastor Andrew Branson. Turkey retaliated by announcing the introduction of duties on American products. President Erdogan called for a boycott of the iPhone and other electronics made in the USA.

Given that, what pace is gaining momentum anti-American axis, once again the question arises: when and under what circumstances China and other countries will join the demonstrative selling of US debt?

Turkey after Russia gets rid of us government debt. According to the U.S. Treasury from the end of 2017 the volume of treasuries in the Central Bank reserves fell by 52%, while in may the number was $32.6 billion, and in June – already at least $30 billion.

Thus, Turkey, like Russia, left a list of the largest holders of US government debt, where the threshold value stands at $30 billion.

I note that according to published few hours ago statistics, our country is no longer resorted to active operations and has kept the volume of treasuries in the amount of $14.9 billion.

I recall that in the beginning of the year the gold reserves of the Bank of Russia was of treasuries worth around $100 billion, which is less than six months, all these papers were almost completely eliminated. The main intrigue consists in, when your sale will China as the largest holder of treasuries.

In June, China reduced their investments by only $4.5 billion.

In General, the us national debt now stands not the object of investments, and the object of divestment. In June was huge sale of treasuries by both official institutions and private financial institutions in the total of nearly $50 billion.

One of the most active sellers became Japan – America’s allies. The country sold treasuries of $18.4 billion dollars, reducing investments to a minimum since October 2011

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