“Foreign demand for U.S. Treasury debt rose to a record high in January. China, the largest buyer of Treasury debt, increased its holdings for the first time in six months.
Total foreign holdings rose 0.9 percent in January to $5.05 trillion, the sixth consecutive monthly increase, the Treasury Department reported Thursday.
China boosted its holdings 0.7 percent to $1.16 trillion. Japan, the second-largest buyer of Treasury debt, increased its holdings 2 percent to a record $1.08 trillion.
U.S. government debt is considered one of the safest investments. Demand for it has increased as Europe’s debt problems have intensified.
The demand has remained strong despite the first-ever downgrade of the government’s credit rating last August. Standard & Poor’s lowered its rating on long-term Treasury debt one notch from AAA to AA-plus following a prolonged debate in Congress over increasing the nation’s borrowing limit.
The nation’s borrowing needs will remain high based on projections of future deficits….”
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