03.04.09

From December 2007 through December 2008, Russia more than tripled its investments in US treasury bonds, increasing it from $32.7bln to $116.6bln, according to estimates published by Russia’s Ministry of Finance and the US Federal Reserve System. Russia holds fifth position in the list of top countries holdings of US national debt. The list is headed by China ($727.4bln) with $77.2bln held by Hong Kong.

Second place belongs to Japan ($626bln), followed by Great Britain ($130.9bln) and Brazil ($127bln). OPEC countries have purchased $186.2bln, and Caribbean financial centers - $197.5bln.

The greatest surge of Russian purchases of US bonds came in May 2008 when the numbers grew from $65.3bln to $95.2bln. This was made possible partly because, in the first half of the year, Russia reduced investments into Fannie Mae and Freddie Mac stocks ($100bln at the beginning of fiscal year), stated Eugeny Nadorshin of “Trust.”

In 2009, Russian investments into US treasuries may decrease as Russia's international reserves are spent, but the decrease should not exceed 15%, according to Nadoshin.

Although US budget deficit in 2009 will exceed $1.3 trillion, and in 2010 - $1.75 trillion, purchases of treasuries are likely to fall. In January 2009, exports from China dropped by 17%, exports from Japan in December 2008 decreased by 35%. According to forecast by US Energy Information Administration, in 2009 profits received by OPEC countries from oil exports to US, will amount to $402bln, - 59% less than in 2008.

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Source: “Vedomosti”