Foreign central banks' U.S. debt holdings rise: Fed

NEW YORK Fri Dec 21, 2012 3:03am IST

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NEW YORK (Reuters) - Foreign central banks' overall holdings of U.S. marketable securities at the Federal Reserve rose in the latest week, data from the U.S. central bank showed on Thursday.

The Fed said its holdings of U.S. securities kept for overseas central banks rose $13.12 billion in the week ended December 19, to stand at $3.234 trillion.

The breakdown of custody holdings showed overseas central banks' holdings of Treasury debt rose by $15.9 billion to stand at $2.883 trillion.

Foreign institutions' holdings of securities issued or guaranteed by the biggest U.S. mortgage financing agencies, including Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), fell by $3.1 billion to stand at $315.2 billion.

The Fed said its holdings of so-called "other" securities held in custody and reported at face value rose by $325 million to stand at $36 billion. These securities include non-marketable U.S. Treasury securities, supranationals, corporate bonds, asset-backed securities and commercial paper.

Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years and own more than a quarter of marketable Treasuries. China and Japan are the biggest foreign holders of Treasuries.

The full Fed report can be found on: here

**Please note that in the week ended November 15, 2012 the Fed changed how it calculates the data covering securities held in custody for foreign official and international accounts.

Custody holdings of U.S. Treasuries held by the central bank does not include those securities pledged by the Fed as "collateral in reverse repurchase agreements conducted with foreign official and international accounts," the Fed advised.

It added that the data now incorporates "inflation compensation on Treasury Inflation-Protected Securities (TIPS), which captures the inflation adjustment to original face value of TIPS over time."

The calculation for agency debt holdings was revised to reflect current face value rather than original face value as previously reported, the Fed said.

(Reporting By Daniel Bases; Editing by Chizu Nomiyama)

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