The Reserve Bank of India (RBI) has sold US treasury (USTs) bonds worth $16.3 billion since April, with the country's stock plummeting to $140 billion in late August, according to The Economic Times.
The newspaper reported that the sale came amid RBI's efforts to tackle the increasing slide of the rupee and "trim" its holding of US Treasuries as the RBI "joins many other emerging economies which have been selling off US bonds amid rising [interest] rates."
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The Indian rupee lost more than 10 percent of its value against the dollar after foreign portfolio investors (FPI) pulled out more than $10 billion in investments in the Indian markets since April. In this vein, a report by Bank of America Merrill Lynch predicted that "if FPI flows do not revive amid a US-China trade war, the RBI may need to sell another $10-15 billion by March."
In mid-October, Beijing sold $3 billion of sovereign dollar bonds in the face of the ongoing US-China trade spat, in a move that Bloomberg described as "an even bigger demonstration of China's pull in the international bond market."
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Ziyun Wang, partner and senior portfolio manager at DeepBlue Global Investment Ltd, for his part, argued that "the bond issuance is more like a vote of confidence in China's creditworthiness."
US Treasury Secretary Steve Mnuchin, in turn, said that he is not "losing any sleep" over the prospect of China selling its stockpile of US government bonds.
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China remains the main holder of US Treasury bonds, with its holdings amounting to more than $1.18 trillion. Japan is second, owning more than $1.04 trillion.
