China’s dollar exit strategy is now gaining massive momentum as China continues to diversify away from the US dollar. The value of the US treasuries held by China has fallen by $27B as of late, signaling the nation’s shift and pivot away from the American currency.
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China Is Moving Away From The USD
According to global market investors, China is heavily in the process of diversifying away from the US dollar. The country’s reserves have swapped US dollars for gold, portraying a foray away from the dollar.
“Overall, foreign Treasury holdings fell $36 billion in April, to $9.01 trillion, the second-highest on record…. It seems like China continues to officially diversify from the US dollar into gold but secretly wants to hold some more Treasuries for additional legal, political, and operational protection.” The outlet later shared.
The Treasury Department data statistics further shared that this net decline is driven by foreign private investors. The data further signals China’s foray into gold, as it continues to stockpile the metal at a rapid pace.
Share of US Treasury in China Plummets Dramatically: Lowest in 15 Years
The share of US treasury holdings in Chinese currency has fallen to 22% from its earlier threshold of 37%.
“The share of US Treasury holdings in Chinese currency reserves has declined to ~22% from ~37% since 2016, near the lowest in at least 15 years.
At the same time, China continues to purchase gold, buying nearly 15 tonnes of gold in May, with the majority of its metal purchases ranging between 25 and 60 tonnes in the past decade.
“China bought 15 tonnes of gold in May, according to Goldman Sachs estimates, 8 times more than officially reported figures. As you can see on the chart, over the past year, China’s monthly purchases have oscillated between 25 and 60 tonnes.” The platform noted
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