U.S. Net Long Term TIC Flows Come In Above Consensus in February
Published: April 14, 2009
(CEP News) - Net long-term TIC flows came in well above the consensus forecast,
totalling +$22 billion in February. Meanwhile, total TIC flows for the month
fell to -$146.8 billion, according to data released by the U.S. Treasury on
Wednesday.
Economists had been expecting net long-term flows to rise to $14.0 billion
compared to the previous month's downwardly revised -$36.8 billion figure.
Total net TIC flows in January were revised up to -$146.8 billion from a
previously reported -$148.9 billion.
Net foreign purchases of long-term U.S. securities were +20.8 billion, and of
that, net purchases by private foreign investors were +$25.9 billion, while net
purchases by foreign official institutions were -$5.1 billion.
Foreign holdings of dollar-denominated short-term U.S. securities, including
Treasury bills, and other custody liabilities increased $43.1 billion. Foreign
holdings of Treasury bills increased $63.3 billion, the Treasury Department
reported.
The monthly Treasury International Capital report measures net capital flows
crossing U.S. borders, or how much capital comes to the U.S. from other
countries and how much capital leaves the U.S. for other countries. The
difference between the two reflects the current account balance
This data represents the balance of domestic and foreign investment - for
example, if foreigners purchased $100 billion in US stocks and bonds, and the
US purchased $30 billion in foreign stocks and bonds, the net reading would be
70.0B. The market impact tends to be significant but varies from month to month.
Demand for domestic securities and currency demand are directly linked because
foreigners must buy the domestic currency to purchase the nation's securities.
Source Department of the Treasury
