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Jul 18, 4:12 PM EDT

Foreign ownership of US debt slips again in May


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AP Photo/J. David Ake

WASHINGTON (AP) -- Foreign holdings of U.S. Treasury securities fell for the second straight month in May.

The Treasury Department said Monday that total foreign holdings dropped 0.5 percent to $6.21 trillion after slipping 0.8 percent to $6.24 trillion in April.

Japan, the second-biggest foreign owner of Treasury securities, reduced its holdings by 0.8 percent to $1.13 trillion. China, the biggest foreign investor in Treasurys, increased its holdings slightly to $1.24 trillion. Mexico cut its Treasury holdings by 9.3 percent to $59.8 billion.

The national debt is nearly $19.4 trillion and is expected to grow, which means the United States will need foreigners to keep buying Treasury securities.

Of the debt total, nearly $14 trillion is publicly traded on financial markets. The rest is money the government owes itself, including holdings in the Social Security trust fund.

Foreigners own more than 40 percent of the publicly traded debt. Most of those holdings - more than $4 trillion - belong to foreign governments, primarily central banks. They see Treasury securities as one of the world's safest investments.

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