{"id":36917,"date":"2018-08-22T06:35:56","date_gmt":"2018-08-22T11:35:56","guid":{"rendered":"http:\/\/olduvai.ca\/?p=36917"},"modified":"2018-08-22T06:35:56","modified_gmt":"2018-08-22T11:35:56","slug":"did-russia-really-dump-its-u-s-debt","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=36917","title":{"rendered":"Did Russia Really Dump Its U.S. Debt?"},"content":{"rendered":"
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DID RUSSIA REALLY DUMP ITS U.S. DEBT?<\/a><\/h3>\n<\/div>\n<\/header>\n
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\nRussia dumped 84% of its American debt,\u201d blared a July\u00a0CNN headline<\/a><\/u>.\u00a0Russian central-bank head\u00a0Elvira Nabiullina<\/a><\/u>\u00a0said the sales were just part of \u201cdiversifying the entire structure of currencies.\u201d But with the U.S. dollar accounting for two-thirds of global foreign-exchange reserves and most (non-intra-eurozone) international trade, dumping this much dollar debt goes well beyond prudent diversification.<\/p>\n

Many commentators have therefore speculated that the government was actually protecting itself against future U.S. economic attacks. \u201cIt looks like Russia was worried about sanctions and their ability to trade Treasuries,\u201d said\u00a0one head bond trader<\/a><\/u>, \u201cso they sold.\u201d<\/p>\n

Still, the Russian central bank needs dollars, which it has always held mainly in the form highly liquid interest-bearing U.S. Treasuries, to stabilize the ruble through market intervention and to help its banks manage liquidity. Furthermore, Russian president Vladimir Putin has\u00a0stated<\/a><\/u>\u00a0that \u201cRussia is not rejecting the dollar\u201d and is \u201cnot planning any sudden moves.\u201d This doesn\u2019t jibe with the media headlines.<\/p>\n

We therefore decided to explore another possibility: that the headlines are just plain wrong, and that Russia has not sold anywhere near that many Treasuries.<\/p>\n

Let us start with U.S. Treasury Department data on holdings of Treasury securities. These do indeed show an $81 billion (84 percent) plunge in Russian-held Treasury debt\u2014from $96 billion in March to $15 billion in May. Other figures, however, suggest that Russia\u2019s actual selloff was much smaller than this.<\/p>\n

One indicator is Treasury Department data that track sales, between U.S. and foreign entities, of long-term Treasuries\u2014the sole component of Russia\u2019s Treasury holdings that has dropped since March. From March to May, these data show just $35 billion of Russian sales, as the middle bar in the left-hand box above indicates.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

DID RUSSIA REALLY DUMP ITS U.S. DEBT? Russia dumped 84% of its American debt,\u201d blared a July\u00a0CNN headline.\u00a0Russian central-bank head\u00a0Elvira Nabiullina\u00a0said the sales were just part of \u201cdiversifying the entire structure of currencies.\u201d But with the U.S. dollar accounting for two-thirds of global foreign-exchange reserves and most (non-intra-eurozone) international trade, dumping this much dollar debt […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,5],"tags":[12292,122,7380,694,839,2721],"class_list":["post-36917","post","type-post","status-publish","format-standard","hentry","category-economics","category-geopolitics","tag-benn-steil","tag-central-bank","tag-cobden-centre","tag-russia","tag-us-dollar","tag-us-treasuries"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36917","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36917"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36917\/revisions"}],"predecessor-version":[{"id":36918,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36917\/revisions\/36918"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36917"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36917"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}