CHINA TELLS BANKS TO CUT US TREASURY EXPOSURE

Chinese regulators have instructed major banks to limit new purchases of US Treasuries and reduce large existing positions, citing concentration risk and market volatility, according to people familiar with the matter.

The guidance, delivered verbally in recent weeks, does not apply to China’s official state holdings. Officials framed the move as risk diversification rather than geopolitics or doubts about US creditworthiness and set no specific targets or deadlines.

Treasury prices slipped on the news, pushing yields higher, while the dollar weakened slightly. Chinese banks held about $298 billion in dollar-denominated bonds as of September, though the share in Treasuries is unclear. The People’s Bank of China and the National Financial Regulatory Administration declined to comment.