Brazil, Russia to sell US Treasuries out of dollar limit

In the past few days, large emerging economies such as China, Brazil and Russia have announced that they will consider buying bonds issued by the IMF.　　Russia and Brazil have said publicly that they will consider reducing the proportion of their foreign reserves used to buy US Treasuries in an effort to free up money to buy IMF bonds.　　In the context of the first BRIC summit, the developments have also sparked speculation and concern in the international market about the potential for a new wave of dollar asset sales, with treasury prices falling sharply. Brazil will buy 10 billion of billions of dollars in IMF bonds for the first time as the organization's creditor countries, the Brazilian finance minister, Mr. Mantega, said 10th.　　Brazil's existing foreign exchange reserves are 200 billion dollars. Also on 10th, Ulukayev, the first vice president of the Russian Central bank, said in Moscow that if the IMF were to issue bonds in the fourth quarter of this year, the Russians would plan to use gold and foreign exchange reserves to buy them, but the total amount would not exceed 10 billion dollars.　　Russian official statistics show that as of June 1, Russia's foreign exchange and gold reserves of about 404 billion U.S. dollars. Earlier this month, China's State Administration of foreign exchange (EFAC) heard news that China was willing to buy no more than $50 billion trillion of new bonds issued by the IMF in a safe and reasonably profitable range.　　It is reported that the IMF needs to raise at least 500 billion dollars. Another BRIC member, India, may also announce similar moves, according to Brazilian Finance Minister Mantega 10th.　　Diplomats say India may also announce the purchase of IMF bonds that are close to the amount promised by Brazil and Russia. The statistics show that the BRIC countries currently have a total of $2.8 trillion trillion in foreign exchange reserves, which are also the largest overseas holders of US Treasuries. The first BRICS summit will be held in Jekaterinburg, Russia, 16th next month. The leaders of the four major emerging economies, China, Russia, India and Brazil, will gather to talk about the world economy and other major international issues.　　Some analysts say sensitive topics such as dollar asset security and hyper-sovereign currencies could also be addressed at the summit. Russia has said publicly that it will reduce its holdings of U.S. debt in the eyes of the market, the news may not be good for the U.S. dollar and U.S. bonds, because the countries that were originally used to buy US debt may be partly transferred to the purchase of IMF bonds.　　In fact, some economies have openly expressed such intentions. Ulukayev, the first deputy governor of the Russian Central Bank, said 10th that more than 30% of Russia's foreign exchange and gold reserves are being used to buy US Treasuries, a share that could be lowered in the future. Ulukayev told the media that as the financial situation became normal, Russia planned to gradually replace its own holdings of sovereign bonds of the United States and other countries with other financial instruments. He says the vast majority of Russian foreign exchange and gold reserves are being used to buy sovereign bonds in the US and other countries, because the risk of investing in other financial instruments has risen recently.　　Brazilian officials also said in Wednesday that the country plans to sell US Treasuries because of the purchase of IMF bonds. Financial markets immediatelyNews of the response, U.S. Treasury yields on 10th to the highest level so far this year, investors fear that the rise in U.S. debt has undermined the dollar reserve power demand for US Treasuries. The yield on the 10-year Treasury note rose from 3.86% to 3.99% 10th. The yield fell to around 3.92% yesterday morning in London. David, a strategist at the Dutch International Group, notes that the 10th fall in U.S. Treasuries was partly influenced by statements by Russia and Brazil.　　The dollar index was once less than 79.483 after the announcement, and it was near 79.662 before the announcement. A big sell-off is unrealistic. However, at this stage, it is unlikely that major economies will be able to dump dollar assets on a large scale, both from official and civilian analysis, as it would also affect the interests of the holders.　　On the contrary, more people believe that a similar move to buy IMF bonds is to help further global recovery from the recession and financial crisis and to exert greater international influence on emerging economies. Russian Central bank officials have said Russia will not sell US Treasuries immediately, but will wait until the bonds expire and gradually replace them with other assets. Brazil's finance minister stressed that while Brazil's lending to the IMF would be in the form of an IMF bond, Brazil was not deliberately pressuring the dollar.　　Chinese officials have also repeatedly said that the BRICS are not going to abandon the dollar, such a reference is unrealistic. Analysts at Goldman Sachs said yesterday that "the BRIC countries ' recent announcement that they will take out some of the reserves to buy IMF bonds may not necessarily indicate a sharp drop in demand for dollar assets, but more should be seen as a sign that the economies ' growing voice and influence in the international financial system are likely to emerge.