Chinese banks increase U.S. Treasury holdings
Reports indicate that Chinese banks have been purchasing U.S. Treasury bonds in recent months after yields rose, a move that could help curb the strengthening of the local currency, the yuan. This coincided with the yield on 10-year U.S. Treasury bonds increasing by more than 30 basis points since June to 4.76%, amid concerns over inflation, U.S. debt, and improving economic growth prospects in the United States. Additionally, Chinese banks, especially smaller and foreign ones, are raising their interest rates on dollar deposits to nearly 4%, aiming to attract deposits for the purchase of U.S. Treasury bonds, despite heightened regulatory scrutiny of foreign investments.
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