Reports indicate that China has instructed its banks to reduce exposure to U.S. Treasuries. If sustained, this could mean a gradual shift away from U.S. debt holdings, potentially impacting global financial markets.
Lower foreign demand for Treasuries may increase U.S. borrowing costs and put upward pressure on interest rates. At the same time, analysts suggest China could diversify further into hard assets such as gold and silver as part of a broader reserve strategy.
Any significant adjustment in reserve allocation by major economies like China can influence global liquidity, currency dynamics, and investor sentiment. The key question now is how markets and policymakers will respond if this trend accelerates.
