Foreign central banks' US debt holdings rise - Fed

NEW YORK Thu Dec 27, 2012 4:29pm EST

NEW YORK Dec 27 (Reuters) - Foreign central banks' overall holdings of U.S. marketable securities at the Federal Reserve rose in the latest week, data from the U.S. central bank showed on Thursday.

The Fed said its holdings of U.S. securities kept for overseas central banks rose $4.502 billion in the week ended Dec. 26, to stand at $3.238 trillion.

The breakdown of custody holdings showed overseas central banks' holdings of Treasury debt rose by $8.604 billion to stand at $2.891 trillion.

Foreign institutions' holdings of securities issued or guaranteed by the biggest U.S. mortgage financing agencies, including Fannie Mae and Freddie Mac, fell by $4.148 billion to stand at $311.05 billion.

The Fed said its holdings of so-called "other" securities held in custody and reported at face value rose $45 million to stand at $36.02 billion. These securities include non-marketable U.S. Treasury securities, supranationals, corporate bonds, asset-backed securities and commercial paper.

Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years and own more than a quarter of marketable Treasuries. China and Japan are the biggest foreign holders of Treasuries.

The full Fed report can be found on:

**Please note that in the week ended Nov. 15, 2012 the Fed changed how it calculates the data covering securities held in custody for foreign official and international accounts.

Custody holdings of U.S. Treasuries held by the central bank does not include those securities pledged by the Fed as "collateral in reverse repurchase agreements conducted with foreign official and international accounts," the Fed advised.

It added that the data now incorporates "inflation compensation on Treasury Inflation-Protected Securities (TIPS), which captures the inflation adjustment to original face value of TIPS over time."

The calculation for agency debt holdings was revised to reflect current face value rather than original face value as previously reported, the Fed said.