International Demand for U.S. Assets Slowed in April
International purchases of American financial assets grew more slowly in April as China, Japan and Russia pared demand for Treasuries, underscoring the danger of U.S. reliance on foreigners to finance its fiscal deficit.
Total net purchases of long-term equities, notes and bonds rose a net $11.2 billion, compared with buying of $55.4 billion in March, the Treasury said today in Washington. International holdings of Treasuries increased a net $41.9 billion, compared with the $55.3 billion gain in March. Including bills, the holdings fell a net $2.6 billion.
Benchmark 10-year Treasuries, which rose after Russian Finance Minister Alexei Kudrin said it’s “too early to speak of an alternative” to the dollar, remained higher after today’s report. That indicates investors have yet to see evidence that international money managers are losing confidence in the currency that has proved a haven during the credit crisis.
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