Foreign Capital Flowing in As US Keeps its Title as Safe Haven
By TJ Kim – Bondsquawk
October 17, 2012
The U.S. Department of the Treasury released Treasury International Capital (TIC) for August. The result showed that there was a net capital inflow of $91.4 billion. As uncertainty regarding global economic hardship persists, the U.S. continues to be the safe haven for foreign asset.
According to the U.S. Department of the Treasury,
“Foreign residents increased their holdings of long-term U.S. securities in August – net purchases were $78.5 billion. Net purchases by private foreign investors were $48.6 billion, and net purchases by foreign official institutions were $29.9 billion.”
On the other hand, the data shows that U.S. residents’ holdings of foreign securities decreased with net sales of $11.5 billion.
August’s TIC indicates that amid the global financial distress, U.S securities markets stand as safe haven for foreign investors from Asian and Europe. U.S. investors however are retrieving capital from their investments in foreign securities markets as situations in Europe and consequentially in Asia and emerging market heightens volatility.
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