At $242 billion, India 12th largest holder of US treasuries in June

MUMBAI: Given the high yields that the US government debt has been offering since the interest rates there peaked to a multi-decadal high, the Reserve Bank has been ramping up its investments in the world’s most sought-after public debt instrument.

India’s investment in these instruments touched a high of $241.9 billion in June, the third straight month of rising exposure, making it the 12th largest entity owning American treasuries. In June 2023, the exposure was worth $235.4 billion.

With the global financial crisis of 2007-08, which began in the US and pulled the global economy down into a long deep recession for nearly three years, the US Federal Reserve had slashed interest rates or Federal fund rates to zero to negative zone, and the gradually rose to nearly 2.5% till the pandemic-induced inflation spike that had crossed 9%, the highest since the 1980s oil crisis. This forced the Fed to jack up rates and is now hovering around 5-5.25% — again a multi-decadal high, leading to a massive spike in treasury yields.