Pandemic Panic Produced Historic, Quarter-Trillion Decline In Foreign Treasury Pile

Foreign holdings of US Treasurys dropped the most in at least two decades during March, the latest TIC data shows. The drop clocked in at $256.6 billion, bringing total foreign holdings down to $6.81 trillion, from $7.07 trillion in February. Net, foreigners sold $299.35 billion in Treasurys, the transactions table shows. That's a record. In February, by contrast, they bought a net $4.9 billion. The drop has no precedent - at least not going back to 2000. One of the more notable stories in early April (i.e., after the calendar flipped on what was arguably the most tumultuous month for markets in history), was a record drop in marketable Treasury securities held in custody for foreign official and international accounts. Specifically, the drop for March was nearly $110 billion (documented here). That was a record, and it wasn't even close. That underscored the extent to which March was defined by a mad dash to raise USD cash. The veritable fire sale of USTs represented an apparently frantic effort to obtain dollars, and was in no small part responsible for the Fed’s decision to roll out a foreign repo facility to compliment swap lines which were enhanced and expanded dur