China sold $22 billion in US Treasurys in July, and its holdings of US government debt fell to the lowest level in more than three years, a sign that the mainland needs the investment funds, according to Caixin. By the end of July, China’s US Treasury reserves fell to $1.22 trillion, the latest data issued by US Treasury Department on Friday showed. Reserves have fallen about 7.6% since November 2013 when China held $1.32 trillion in US Treasurys. China’s selling of US government bonds comes as the country tries to prop up the yuan to arrest capital flight. The yuan is under pressure of further devaluation with the expectation that the US Federal Reserve may raise interest rates soon. The selloff is also a way to diversify China’s holdings.
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