Turkey Follows Russia in Dropping Off Top U.S. Creditor List

(Bloomberg) -- Turkey dropped off the U.S. government's list of major owners of Treasury debt, following in the footsteps of Russia in reducing its portfolio.

Turkey's holdings of bonds, bills and notes have fallen 42 percent in the first half of this year, dropping to $28.8 billion in June, according to a Treasury Department report released Wednesday. Treasury has a floor of $30 billion to be classified as a major holder.

Russia, which had previously been a top-10 foreign creditor to the U.S., remained off the list in June after slipping below the threshold a month earlier. Russia's holdings held at a more than decade low of $14.9 billion, the Treasury data showed.

The sell-offs come as both economies are being squeezed by toughening U.S. sanctions and trade actions. The Trump administration last week imposed new sanctions against Russia in response to the nerve agent poisoning in the U.K. of a former Russian spy and his daughter.

U.S. relations with Turkey soured this week after President Donald Trump doubled steel and aluminum tariffs to pressure the nation to release a jailed American pastor. Turkey increased the tensions by announcing new tariffs on American products such as cars as President Recep Tayyip Erdogan called for a boycott of iPhones and other U.S. electronics.

The holdings of China, the largest foreign holder of U.S. Treasuries, fell by $4.4 billion to $1.18 trillion. Japan's portfolio of Treasuries, the second-largest, fell to a more than six-year low of $1.03 trillion.

Overall, foreign ownership of Treasuries was almost unchanged at $6.21 trillion in June.

Countries whose portfolios of Treasuries rose included the U.K., the fifth-biggest holder with $274 billion in American government debt from $265 billion in May. Others with a larger amount in June included Luxembourg, Singapore, Cayman Islands, South Korea, Belgium and Italy.

To contact the reporter on this story: Sarah McGregor in Washington at smcgregor5@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Sarah McGregor, Alister Bull

©2018 Bloomberg L.P.