India’s exposure to US debt increases in April; holds over $51.2 billion securities

In the midst of persisting global economic turmoil, India has been increasing its investment in US Treasuries since the start of this year and holds US government securities worth $51.2 billion till April. This is also the first time since April 2011 that the value of India's investments in US Treasuries crossed the $50 billion mark. With euro-zone turmoil threatening to worsen the already fragile global economy, in the hope of safer option, many emerging nations struggling with slowdown has started investing in US government securities.

According to the data available from the US Treasury department, India's investments in US Treasuries has increased to $9 billion since the first 4-months of 2012, by the end of April, India holds securities worth of $51.2 billion compared to $42.8 billion in January. Showing signs of increase, India's investment in US Treasuries rose to $44.1 billion in February, which further climbed up to $46.7 billion in March, which again went up by $5 billion in between March & April.

This is mainly due to the uncertainty over the future of euro, the currency which is shared by 17 European nations. The prevailing world economic situation and overall volatility in currency markets have also made the US dollar a safe haven. As on April, India's investment in US Treasuries is higher than any developed nations including South Korea $41.6 billion and Italy $24.6 billion.

China, which is the largest holder of US treasury securities, holds up to $1.145 trillion at the end of April, while Japan is the second biggest holder of US treasury securities, which were worth $1.066 trillion in April. The US is the world's largest economy that grew up to 1.9% in the three months ended March 2012.