{"id":105068,"date":"2018-12-12T02:15:50","date_gmt":"2018-12-12T02:15:50","guid":{"rendered":"https:\/\/www.bnreport.com\/rbi-turns-net-buyers-of-us-treasuries-in-september\/"},"modified":"2018-12-12T02:15:50","modified_gmt":"2018-12-12T02:15:50","slug":"rbi-turns-net-buyers-of-us-treasuries-in-september","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/rbi-turns-net-buyers-of-us-treasuries-in-september\/","title":{"rendered":"RBI turns net buyers of US Treasuries in September"},"content":{"rendered":"

MUMBAI: The Reserve Bank of India<\/a> was a net buyer of US treasury securities in September, snapping a five-month selling streak. The Indian central bank may have sought to earn higher interest income from the worlds safest debt investment, anticipating a softening of US sovereign yields that has risen to seven-year high this year.<\/p>\n

The RBI<\/a> bought $3.4 billion of securities during the month to increase its holdings to $144 billion, according to data from the US Federal Reserve Board.<\/p>\n

\u201cRBI buying US treasury bonds in September, the first time after five months of selling, was unusual in the context of the extreme financial market volatility that month,\u201d said Saugata Bhattacharya, chief economist at Axis Bank<\/a>. \u201cThe magnitude of the buy suggests that this was not a fresh allocation since Indias forex reserves were mostly static in September.\u201d<\/p>\n

Indias forex reserves were at about $400 billion throughout September, although they had eroded by about $7 billion by November end.<\/p>\n

\u201cAn inference is that this might have been a rebalancing of RBIs offshore investment portfolio into the safe haven of the dollar and US treasuries<\/a>,\u201d said Bhattacharya.<\/p>\n

US treasury bonds are perceived to be the safest investment bet in the world. This year, the benchmark treasury yield shot up 47 basis points while it peaked at a seven-year high of 3.24% on November 8. It now yields 2.89%.<\/p>\n

\u201cAn RBI treasury investment call on a future softening of US yields might have reinforced that decision,\u201d said Bhattacharya.<\/p>\n

The RBI sold $16.4 billion worth of US treasury bonds since April with its holdings slipping to $140.6 billion at the end of August from $157 billion at the end of March, the data showed.<\/p>\n

\u201cOn a risk-return trade-off basis, the RBI has gone back to sovereign bonds of the worlds reserve currency<\/a> economy,\u201d said Joydeep Sen, consultant \u2013 fixed income, at Phillip Capital<\/a> (India). \u201cThe primary objective of the RBI is not to make trading gains \u2013 the reason why they were not buying is to diversify.\u201d<\/p>\n

The US Federal Reserve is widely expected to change its interest rate stance next year as an element of slowing domestic growth looms. Policy makers, too, have hinted at a slower pace of rate increases.<\/p>\n

Other emerging economies, too, had sold their US bonds since April, amid rising rates. India is ranked 13th among the major foreign holders of US treasury securities, which total $6.2 trillion. China leads with holdings of $1.15 trillion, followed by Japan with $1.03 trillion. <\/p>\n

<\/a><\/strong> <\/a><\/p>\n

Original Article<\/a>
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ET Markets<\/a><\/h5>\n

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MUMBAI: The Reserve Bank of India was a net buyer of US trea..<\/p>\n","protected":false},"author":1,"featured_media":105069,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202],"tags":[],"class_list":["post-105068","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nRBI turns net buyers of US Treasuries in September - Business News Report<\/title>\n<meta name=\"description\" content=\"MUMBAI: The Reserve Bank of India was a net buyer of US trea..\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bnreport.com\/en\/rbi-turns-net-buyers-of-us-treasuries-in-september\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RBI turns net buyers of US Treasuries in September - 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