Owning a stake in Washington: Russia buying up more US debt amid pandemic downturn & growing political tensions with White House
The US Treasury has announced that the share of its government securities and bonds owned by Russia rose in January, with Moscow spending more money to acquire Washington’s debt, as the country’s borrowing rises still further.
On Tuesday, officials in Washington announced that Russia now owns $6.145 billion worth of US government securities, up from $6.011 in December last year.
This represents a policy change from March 2020, when Moscow cut its investments in US national debt by more than three times, down from $12.58 billion to just $3.85 billion. However, it has since generally been increasing its share month on month as America borrows more to cover the cost of the Covid-19 pandemic.Also on rt.com Russia slashes its foreign debt by $21.3 billion in 2020
Earlier this year, the Congressional Budget Office released a report highlighting that US debt had risen to 100% of GDP for the first time since WWII. Despite that, traders have reportedly not yet expressed fears about the scale of borrowing, and its government bonds continue to be an attractive prospect, breaking sale records in 2020.
Meanwhile, Russia has used the period to slash its own public liabilities. In January, Moscow’s Central Bank announced that its own national debt had dropped by $21.3 billion to a total of $470.1 billion. “Decreases in debt liabilities to non-residents were observed for all sectors of the economy, of which the most noticeable decline was registered for other sectors under credits,” officials said.Also on rt.com Increasing debt to boost economies obsolete & serves to widen gap between rich and poor – Putin
At a meeting of the World Economic Forum that month, Russian President Vladmir Putin argued that increasing the debt burden was an outdated way of stimulating growth. “If 20 or 30 years ago the problem could be solved by means of stimulating macro-economic policy, today these mechanisms have reached their limits,” he said.
“Over the past 30 years, real incomes of people living in most of the developed countries have stagnated while the cost of education and health services has increased. Millions of people, even in rich countries, no longer see the prospect of boosting their incomes,” Putin added.
Earlier this month, Russia slammed new US sanctions against more than a dozen companies it claims were involved in a secretive purported chemical weapons program, amid growing political tensions between the two countries. Kremlin spokesman Dmitry Peskov dismissed the allegations, insisting “Russia has no chemical weapons.”
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