Foreign demand for U.S. securities weakened in May as the country hit its borrowing limit, but China increased its holdings for the second month in a row, the Treasury said on July 18.
Net foreign buying of U.S. long-term securities in May -- incoming foreign investment less outgoing U.S. investment in foreign debt -- fell by 23% from April to $23.6 billion.
The weaker demand for debt came as the U.S. government hit its legal borrowing limit of $14.3 trillion on May 16.
China, as the biggest investor in the United States, is being closely watched for shifts in its demand for U.S. debt.
For the second month in a row, China increased its Treasury holdings, to $1.16 trillion in May from $1.15 trillion in April.
Japan and Britain, the second- and third-largest foreign buyers of U.S. debt, also raised their holdings, the data showed.
Japan's investment of $912.4 billion was up by $5.5 billion from April.
Britain increased its holding by $13.5 billion, to $346.5 billion.
Copyright Agence France-Presse, 2011
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