Foreign investors dumped short-dated U.S. assets in September amid jitters about the possibility of a debt default, but snapped up longer-dated assets, the latest data from the U.S. Treasury show.
Foreign investors sold a net $106.8 billion worth of U.S. assets including short-dated assets such as bills in September, marking the biggest decline since February 2009, Treasury International Capital (TIC) data released late on Monday showed.
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But the data also showed that net foreign purchases of long-term securities were $25.5 billion in September. Holdings of longer-dated Treasurys rose by $27.8 billion, following a decline of $10.8 billion the month before.
In September, jitters about political wrangling in Washington over the federal budget and debt ceiling grew, with a partial-shutdown of the government in October fueling fears of a possible debt default in the world's biggest economy.
Those jitters led to a spike in yields on short-dated bills, viewed as the most vulnerable to any problems the U.S. government may face in meeting its debt obligations. The U.S. Congress raised the debt ceiling a day before the Treasury said it would run out of cash to meet some of its obligations.