Official accounts turn net sellers of treasuries across globe

Global foreign exchange reserve, after reaching as high as $12 trillion in August 2014, has been declining steadily and might drop as much as a trillion in 2016.

Latest data shows, Chia's foreign exchange reserve declined by $512.6 billion in 2015. After reaching as high as $4 trillion in 2014, China's FX reserve stands at $3.33 trillion. Lower oil price also adding to the downward pressure on global reserve. Oil producing economies such as Norway, Saudi Arabia, Qatar, and Oman have one of world's largest reserve but that has been declining throughout 2015 and likely to intensify in 2016.

Emerging market weakness also have contributed to weakness in global reserve. Emerging market governments had to defend their exchange rate in response to stronger Dollar.

These happenings has led to sharp deterioration in US treasury holdings by foreigners. In 2015, while private accounts are still buying up treasuries, official account has become net sellers and the 12 month rolling pace has reached as much as ($200 billion), heading into end 2015.