Foreign holdings of US debt hit record high in August

Total foreign holdings of U.S. Treasury securities rose to a new high in August, indicating a strong international demand for American government debt amid concerns over global recovery slowdown, the U.S. Treasury Department reported Tuesday. Overall foreign holdings of U.S. Treasury securities reached 5.43 trillion U.S. dollars in August, up from a revised 5.348 trillion dollars in July. It was the eighth consecutive monthly increase. According to the Treasury International capital report, China, the largest foreign holder of U.S. Treasury securities, boosted its holdings by 4.3 billion dollars from July to 1.1536 trillion dollars in August. Japan, the second largest foreign holder of U.S. government debt, increased its holdings from 1.1162 trillion dollars to 1.1215 trillion dollars. The strong demand for U.S. government debt is key to funding its mounting deficit, which has reached 1.089 trillion dollars for the 2012 fiscal year, marking the fourth consecutive year that the U.S. federal government\'s budget deficit has topped 1 trillion dollars.