India becomes 12th Largest Holder of US Government Securities at April 2020 end

Despite low returns, the Treasury Securities (are of four types- Bills, Notes, Bonds, Inflation-Protected Securities) backed by the United States Treasury Department is one of the safest assets for any Central Bank around the world. With USD 157.4 billion at the end of April 2020, India has become the 12th largest holder of United States Government Securities.

India’s holding touched an all-time record high of USD 177.5 billion at the end of February 2020 but was reduced to USD 156.5 billion at the end of March 2020. This significant drop was due to the financial impact of the global COVID-19 pandemic. As economic uncertainties increased following lockdowns in most countries across the world, securities were sold by India in the month of March.

How the Indian Government invests in US Government Securities?

On behalf of the Government of India, India’s Central bank- The Reserve Bank of India (RBI) invests in foreign assets. These foreign investments are part of prudential liquidity management.

Top 5 Countries as per US Government Security holdings (at the end of April 2020)

  1. Japan- USD 1.266 Trillion
  2. China- USD 1.073 Trillion
  3. United Kingdom- USD 368.5 Billion
  4. Ireland- USD 300.2 Billion
  5. Luxembourg- USD 265.5 Billion

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