The record drop in U.S. government
securities held in custody at the Federal Reserve is fueling
speculation that Russia may have shifted its holdings out of the
U.S. as Western nations threaten sanctions.
Treasuries held by foreign central banks dropped by $104
billion to $2.86 trillion in the week ending March 12, according
to Fed data released yesterday, as the turmoil in Ukraine
intensified. As of December, Russia held $138.6 billion of
Treasuries, making it the ninth largest country holder. Russia’s
holdings are about 1 percent of the $12.3 trillion in marketable
Treasuries outstanding, according to data compiled by Bloomberg.
“The timing of the drop in custody holdings makes Russia a
more likely suspect,” said Marc Chandler, global head of
currency strategy in New York at Brown Brothers Harriman & Co.
in a telephone interview. “If Russia did it, then they may have
transferred the holdings to another bank outside of the U.S.”
But wait! I though Russian deposits abroad were one of Obama’s mighty trump cards. You don’t think Putin skewered Bambi again, do you?