India cuts US debt holdings

India cuts US debt holdings by over $1 bn in February.

India slashed its holdings of American debt by a little over USD 1 billion in February while China,which is locked in a currency row with the US,trimmed the holdings by USD 11.5 billion during the same period.

According to the US Treasury Department,India has slashed its holdings to USD 31.6 billion in February,while it was at USD 32.7 billion in January.

China,which is also the largest holder of US Treasury bonds,has cut its holdings to USD 877.5 billion in February,one of the lowest levels in nearly nine months.

In January,China’s holdings stood at USD 889 billion.

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Both the US and China are locked in a row over the issue of revaluation of Chinese currency yuan. In recent months,American authorities have been stepping up pressure on the latter to revalue yuan.

Going by official statistics,China has been trimming its holdings continuously since October last year,when the same was at USD 938.3 billion.

Meanwhile,India’s holdings have come down by more than USD 10 billion since June last year. At that time,India held Treasury bonds worth USD 42.2 billion.

As per the Treasury data,Japan held bonds worth USD 768.5 billion,making it the second largest holder of American debt after China.

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Among the BRIC (Brazil,Russia,India and China) nations,the second largest holder of American debt is Brazil,followed by Russia and India.

As in February,Brazil held Treasury bonds to the tune of USD 170.8 billion,while Russia held American debt worth USD 120.2 billion.

The US economy grew 5.6 per cent in the last three months of 2009,shrugging off the adverse impact of the financial meltdown.