India remains 12th largest foreign holder of US govt securities

Economic Affairs Foreign Investment

India has remained the 12th largest overseas holder of US government securities, just behind oil rich Saudi Arabia, whose holding stood at USD 147.4 billion till the end of last year.

Important points:

US Treasury Department show that the holding of India went up to USD 144.7 billion in December last, an increase of little over USD 26 billion compared to the year-ago period. In December 2016, the exposure was just USD 118.2 billion.
In 2017, neighbouring China was the largest holder of US government securities with holdings to the tune of USD 1.18 trillion, followed by Japan at USD 1.06 trillion. At the third position was Ireland whose exposure rose to USD 326.5 billion.
As per the data, Cayman Islands was at the fourth position with holding worth USD 269.9 billion, followed by Brazil (USD 256.8 billion), the UK (USD 250 billion), Switzerland (USD 249.6 billion), Luxembourg (USD 217.6 billion), Hong Kong (USD 194.7 billion) and Taiwan (USD 180.9 billion).
Among the BRIC countries, India had the third largest exposure while that of Russia was lower at USD 102.2 billion.

About Government securities(Indian context):

Government securities are instruments issued by the government to borrow money from the market. They are also known as gilts or gilt edged securities
“Government security” means a security created and issued by the Government for the purpose of raising a public loan or for any other purpose as may be notified by the Government in the Official Gazette and having one of the forms mentioned in the Government Securities Act, 2006.
Depending upon the expiry date, government securities are divided into short term and long term securities.
Short term government securities are Treasury bills. They have a maturity of less than one year. There are three main treasury bills in India – 91 day, 182 day and 364 day.
Long term government securities are known as government bonds or dated securities. They have a maturity period of five years, ten years, fifteen years etc.

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