Did Russia Just Dump Its Treasury Holdings?

[dcarrigg]

Foreign central banks’ Treasury bond holdings parked at the Federal Reserve dropped by the most on record in the latest week. Some analysts think the crisis in Ukraine is sparking the move.Their theory: Russia is shifting its Treasury bond holdings out of the Fed and into offshore accounts. That way, Russia would be able to buy or sell its portfolio if the U.S. and its European allies impose economic sanctions amid growing geopolitical tensions in Ukraine.

Treasury securities held in custody for foreign official and international accounts tumbled by $105 billion in the week that ended Wednesday, according to weekly data released late Thursday. That shrank Treasury bond holdings by foreign central banks to a 15-month low of $2.855 trillion, though still near a record high of $3.02 trillion set in December.

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[FrankL]

Re: Did Russia Just Dump Its Treasury Holdings?

Suppose the answer is yes, doesn't the resultant impact on (treasury, dollar and gold) prices so far appear rather muted?

[Southernguy]

Re: Did Russia Just Dump Its Treasury Holdings?

Suppose the answer is yes, doesn't the resultant impact on (treasury, dollar and gold) prices so far appear rather muted?

There is 16 t treasuries outstanding.
Russia holds? 200 billion. That is less than 2% of the total. Not much to influence yields.
If they sold them and use the proceedings to buy gold...then it would be a rather different matter.
That's more than 4500 tons. More than half US holdings.
Gold could get a very noteworthy pushup.

[ProdigyofZen]

Re: Did Russia Just Dump Its Treasury Holdings?

You would think they would conduct a preemptive move of selling their USTs to receive dollars before they are dollar starved on the international market during US sanctions?

[GRG55]

Re: Did Russia Just Dump Its Treasury Holdings?

You would think they would conduct a preemptive move of selling their USTs to receive dollars before they are dollar starved on the international market during US sanctions?

As the deficit shrank didn't the quantity of UST issuance decline? Maybe these things are just maturing and there's not enough new issuance to roll it all over? Over the time official foreign holdings have declined (looking at the chart in the first post) the 10 yr UST yield has also declined...it was 3.03% at the start of January and now stands about 2.65%. At a time the Fed is tapering its purchases of same, this doesn't appear to suggest any waning in appetite for USTs.

[Slimprofits]

Re: Did Russia Just Dump Its Treasury Holdings?

poor reading comprehension on my part.