Goodbye, America. Where Russia transferred billions of US debt
Russia has reduced its participation in US debt to their lowest levels since 2007. This maneuver was caused, most likely, the April sanctions. However, the alternatives to us government bonds not so much.
Russia’s participation in US debt fell in may to $15 billion, although at the beginning of the year, the figure exceeded $100 billion for Such a low volume of US government bonds, Russia has not been since 2007. This news has generated a lot of speculation that can easily be classified as conspiracy theories, and seriously to consider, but a few questions still need to answer. In particular, where will be invested released funds.
The impact of sanctions
First and foremost, you need to understand that data about the actual selling of us debt by the Bank of Russia did not arrive. The American statistics are published with a time lag of one and a half months at the end of each calendar month. It featured the holders of Treasury securities across countries without detail.
From March to may there is a sharp decrease in the percentage of holders from Russia.
The Central Bank reveals the structure of its reserves only with a lag of six months, thus, we can only speculate how much of the nearly $80 billion were actually sold by the Russian regulator.
Most experts who commented on the statistics that you specify in “hot pursuit”, noted potential investor concerns ahead of a meeting of leaders of the USA and Russia in terms of increasing sanctions.
But if you raise the history of the approval date of the summit, held on 16 July at Helsinki, we can see that sales took place before fixing of the fact of meetings during April and may. Meanwhile, some certainty about the place and time of negotiations between the presidents appeared only in late may — early June.
From our point of view, the main factor that prompted yet “anonymous” sellers of us debt to hastily close their positions, were not potential in July, and real sanctions in April. April 6 was declared the most severe in recent years, measures against Russia, with the inclusion of many important Russian businessmen in SDN list.