Foreigners Unload US Bonds in December: Treasury

Foreigners closed out 2011 by slashing purchases of long-term U.S. assets, selling the largest amount of government bonds in December in more than two years, U.S. Treasury Department data showed on Wednesday.

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Overseas investors were net sellers of Treasurys to the tune of $16.6 billion, the biggest monthly outflow since May 2009. They were also net sellers of stocks and corporate bonds but were net buyers of U.S. housing agency debt.

Overall, the United States attracted a net long-term capital inflow of $17.9 billion in the final month of 2011 after drawing an upwardly revised $61.3 billion the prior month.

Foreign demand for short-dated assets such as bills was more robust — they bought a net $87.1 billion compared with a revised $42.9 billion inflow in November.

China, the largest foreign U.S. creditor, cut its Treasury holdings by $31.7 billion to $1.101 trillion.