India cuts U.S. debt exposure by $4.20 billion in 3 months

India has lowered its exposure to America's ballooning debt for three consecutive months, as its holding of the U.S. Treasury bonds fell by $4.2 billion (more than Rs.20,000 crore) between May and July this year.

As per the latest foreign holding data released by the U.S. Treasury Department, Indian holding of the U.S. Treasury bonds — debt securities issued by the world's largest economy — fell by $1 billion in July to $37.9 billion.

It was the third consecutive month of decline since May, and the longest declining streak since 2010.

At the end of April, 2011, India held treasury bonds worth $42.1 billion — close to its record high holding of $42.2 billion in June, 2009.

The Indian holding declined for three months even before the first-ever sovereign rating downgrade of the U.S. in August.

The data for August would be released on October 18.

It was widely feared that many of the U.S. treasury investors, including foreign entities, would have cut their holdings after the downgrade by credit ratings agency S&P.

It had cited reasons like inadequate steps by the U.S. to contain ballooning debt for taking the historic action.

The total debt of the U.S. is moving close to $15 trillion, out of which it owes nearly $4.50 trillion to foreign countries that hold U.S. Treasury bonds.