China, the biggest buyer of U.S. Treasury securities, has increased its holdings for a fourth straight month.
The Treasury Department said Wednesday that China's holdings of Treasury debt rose 2.6 percent in October to $906.8 billion. That's the highest level in 11 months.
Overall, foreign holdings of Treasury securities rose 1.1 percent to $4.3 trillion. That indicates that other nations still have a strong appetite for Treasury debt even as the U.S. government continues to run $1 trillion-plus annual budget deficits.
Of the total foreign holdings, $2.85 trillion, or two-thirds, is held by foreign governments and central banks.
Japan, the second-largest holder of Treasury debt, expanded its portfolio to $877.4 billion, a 1.5 percent rise from October.
Britain, ranked third, boosted its holdings by 4 percent to 477.6 billion. Oil exporting nations trimmed their holdings of Treasury securities by 3.4 percent to $213.9 billion.
Net purchases of all long-term U.S. securities, which include government debt and the debt of U.S. corporations, totaled $27.6 billion in October. That's down from a net increase of $77.2 billion in October.
The federal budget deficit surged to an all-time high of $1.41 trillion in 2009. It dipped slightly in the 2010 budget year that ended on Sept. 30 to $1.29 trillion — the second-highest deficit on record.
Economists had expected the federal deficit to decline further in the current budget year. But they have been boosting their estimates since President Barack Obama reached agreement with Republican leaders last for a major tax cut package for next year. Many analysts now expect this year's deficit to top the previous $1.4 trillion record.
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