In the U.S. debt market suffered the worst market conditions in years, the United Arab Emirates in February to buy U.S. bonds, not only the amount of debt purchases to write a record high, the purchase amount even overtake the Chinese mainland, becoming the second largest buyer in the world that month.
According to the U.S. Department of the Treasury data, the United Arab Emirates in February the U.S. debt holdings increased by $ 17 billion to $ 50.6 billion, the month’s purchases second only to the United Kingdom.
UAE is the third largest producer of oil in the Organization of Petroleum Exporting Countries (OPEC), with crude oil reserves accounting for nearly 6 percent of the world.
U.S. bonds fell 1.8% in February, according to the Bloomberg Barclays Index, with the indicative 10-year bond yield rising about 34 basis points, the biggest gain since November 2016.
Abdul Kadir Hussain, head of fixed-income asset management at Arqaam Capital in Dubai, said the U.S. bond market is the most liquid market, and no other reason could be found for the AFL to increase its holdings of U.S. debt, other than the benefit of higher yield rates.
After the global pandemic and the collapse of oil prices, the move brought the U.S. debt holdings of the League back to 2019 levels. Mainland China increased its holdings of U.S. debt by $9 billion in February, bringing cumulative holdings to $1.1 trillion, a new high in 2019.
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