Dubai, UAE — Saudi Arabia reduced its holdings of U.S. Treasury securities by $9.5 billion in April to $140.1 billion, according to U.S. Treasury data, as the kingdom trimmed short-term debt holdings while retaining its position as the world’s 17th-largest foreign holder of U.S. government debt.
The decline followed a sharp increase earlier this year that had lifted Saudi holdings to a six-year high of $160.4 billion in February. Since then, the kingdom has pared back its exposure, largely through reductions in Treasury bills and other short-dated securities.
Saudi holdings stood at $140.1 billion at the end of April, down from about $149.6 billion in March, according to Treasury International Capital (TIC) data released by the U.S. Treasury Department.
The fall was driven primarily by a $9.2 billion decline in short-term Treasury holdings, which dropped 21% month-on-month to $33.5 billion. Long-term Treasury holdings edged down to $106.7 billion.
Long-term securities accounted for roughly 76% of the kingdom’s total Treasury portfolio, while short-term holdings represented about 24%.
Global demand remains resilient
The Saudi reduction came despite continued foreign demand for U.S. government debt.
Overall foreign holdings of U.S. Treasuries rose slightly in April to about $9.35 trillion, near record levels, as purchases by major investors including Japan and the United Kingdom offset reductions by some other holders. Foreign investors bought an estimated $103 billion of U.S. long-term securities during the month, according to Treasury data.
Japan remained the largest foreign holder of U.S. Treasuries with $1.21 trillion, followed by the United Kingdom at $937.5 billion and mainland China at $651.1 billion.
Saudi Arabia ranked ahead of South Korea and behind Brazil among the largest holders.
Reserve management strategy
Analysts generally view movements in Gulf sovereign Treasury portfolios as part of routine reserve and liquidity management rather than a strategic shift away from dollar assets.
U.S. Treasuries remain a core component of Gulf central bank reserves because of their liquidity, safety and role in managing currencies that are either pegged to, or closely linked with, the U.S. dollar.
Recent TIC data show that foreign ownership of Treasuries remains close to historic highs despite periodic speculation about large-scale selling by overseas central banks. Official data indicate foreign holdings increased in April and were up about 4% from a year earlier.
