Jul. 3, 2009 (Action Economics) --
Fed custody holdings hit new record highs the week ending July 1st with treasuries and agency debt held on behalf of foreign official and international accounts rising $27.903 bln in the latest week to $2.781 tln. Average treasury holdings are at $1.960 tln compared to $1.374 tln a year ago while agency holdings are at $806 bln compared to $971 bln a year ago. Agency holdings have declined back to the lows this year at $806 bln which a low level last seen the week of April 22nd which was also the lowest level since the week of November 21st 2007 as investors continue to sell off holdings in Fannie Mae and Freddie Mac. The sharp rise in custody holdings continues to show strong demand from foreign central banks for dollar holdings in reserves. Earlier this week, the IMF reported that USD holdings as a proportion of global reserves rose to 65% in Q1 2009, up from 64% in Q4 2008.
