UPDATE 2-Foreign demand for US Treasuries falls but Belgium strong buyer

(Adds U.S. Treasury purchasing data, buying of other financial assets)

NEW YORK, May 15 (Reuters) - Foreign capital inflow into U.S. Treasuries declined sharply in March, with robust demand coming mainly from Belgium, which extended its recent run of heavy buying of U.S. debt.

Holdings of U.S. Treasuries in Belgium rose a net $40.2 billion in the month. Over the last five months, Belgium’s net increase totaled about $201.1 billion.

The euro zone nation is now the third largest holder of U.S. Treasuries with $381.4 billion, after China and Japan.

The purchases from Belgium were mainly in short-term bills from November to March. But over the same period, Belgian institutions sold $6.82 billion in long-term U.S. Treasury notes and bonds, the data showed.

Who is behind the large purchases from Belgium is unclear.

Euroclear, a major clearinghouse in Europe, is based in Belgium and provides cross-border settlement and custodial facilities. Clearing houses hold collateral such as Treasuries.

Meanwhile, the largest seller of U.S. Treasury securities was Russia at $25.8 billion, mainly in bills. Russian selling of U.S. bonds and notes totaled just $141 million.

Overall, U.S. Treasuries posted net inflows of $25.9 billion in March, slumping from $92.5 billion in February.

Foreigners bought $4 billion in long-term U.S. financial assets in March, compared with revised inflows of $90.3 billion the previous month.

Including short-dated assets such as government and non-government bills, overseas investors sold $126.1 billion in March, reversing inflows of $175.9 billion in February.

Offshore investors also sold U.S. stocks for a fifth straight month, according to the data. U.S. stocks showed a net outflow of $14.4 billion, the largest since August last year.

“It’s broadly disappointing,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York. “It suggests that the U.S. dollar is lacking structural support from capital flows.” (Additional reporting by Phil Blenkinsop in Brussels Editing by W Simon)