U.S. Treasury holdings by the United Arab Emirates and Saudi Arabia experienced an increase in July
In a significant development, foreign holdings of U.S. Treasuries have reached an all-time high for the third consecutive month in July, according to recent data. The total foreign holdings of Treasuries stood at $9.159 trillion, up from $9.126 trillion in June.
This increase in foreign holdings can be attributed to several factors, with the international trade tensions initiated by U.S. President Donald Trump's tariff policy potentially playing a role. The uncertainties in global trade have prompted some countries to increase their U.S. bond holdings as a stable investment amid economic and geopolitical shifts.
Japan and the United Kingdom have recorded a significant increase in their holdings of U.S. Treasury bonds in recent months. Japan's holdings increased to $1.15 trillion, while Britain's holdings rose to $899.3 billion. These increases mark record highs for both countries in July 2025, contrasting with China’s continued decline in holdings. China's holdings decreased to $730.7 billion.
The rise in Japan and the UK's holdings can be linked to the economic and geopolitical shifts caused by trade tensions and inflation risks. Foreign investors hold about 30 per cent of all U.S. Treasuries, making these bonds a popular choice for stable investments during times of global volatility.
Other countries that have seen changes in their holdings of U.S. Treasuries include Belgium, which decreased its holdings to $428.2 billion, and India, which had a dip in Treasury holdings. Canada also experienced a dip in Treasury holdings, but Saudi Arabia's holdings slightly increased to $131.7 billion in July from $130.6 billion in June.
The UAE's holdings of Treasuries also saw an increase, reaching $107.8 billion in July, an increase of more than 10 per cent from June. This increase in the UAE's holdings, along with Saudi Arabia's, contributed to the overall rise in foreign holdings of U.S. Treasuries.
The total foreign holdings of Treasuries were up about 8.7 per cent compared to the previous year, marking a substantial increase in foreign demand for U.S. Treasuries. However, the U.S. President Trump's tariff policy has brought into question the foreign demand for Treasuries this year, as the trade tensions continue to create uncertainties in global markets.
In conclusion, the increase in foreign holdings of U.S. Treasuries can be seen as a response to the economic and geopolitical shifts caused by international trade tensions and inflation risks. As the trade tensions continue, the demand for U.S. Treasuries by foreign investors is likely to remain high, making these bonds a stable investment choice during times of global volatility.
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