Foreign central banks reduce U.S. Treasury holdings to 2012 lows amid geopolitical tensions

Huo Xing Finance reports that, on April 1, according to the Financial Times, foreign central banks have reduced their holdings of U.S. Treasury securities to the lowest level since 2012 in an effort to support their domestic economies and currencies amid the war in Iran. Since February 25, the value of Treasury securities held by official institutions at the Federal Reserve Bank of New York has declined by $82 billion. Some central banks have intervened in foreign exchange markets to support their currencies, typically involving the sale of U.S. dollars in response to crises. Since February 27, the Central Bank of Turkey alone has sold $22 billion in foreign government bonds. Analysis indicates that supply shocks have placed significant pressure on global central banks.