(Bloomberg Opinion) -- Because of a problem with data presented on the Bloomberg terminal, this column was based on incorrect information. Russia’s holdings of U.S. Treasuries actually were $14.097 billion in August, according to the Treasury Department’s website. They did not fall to zero as the column reported. In less than a year, Russia went from owning more than $100 billion of U.S. Treasuries to holding none.

That’s one of the more interesting revelations from the Treasury Department’s monthly report on foreign holders of U.S. government securities. It’s not so much that it’s surprising — after all, Russia slashed its American debt pile by $81.2 billion in the two months through May 31, one of the most aggressive cutbacks from any country in recent memory. The better question is why it took so long. It was stable at $14.9 billion for months.

It’s also curious why Russia would elect to have no exposure whatsoever to the world’s biggest and most-liquid bond market. One of the main reasons it needs dollars is because its oil exports are usually traded in the U.S. currency.

The country’s leaders have provided conflicting answers. President Vladimir Putin said in July that Russia wasn’t abandoning the dollar. But Finance Minister Anton Siluanov said the plan was to cut ownership of American debt, curb reliance on the greenback and protect the Russian economy from any additional U.S. sanctions. It appears to be buying gold as a haven instead.

As Bloomberg News’s Natasha Doff reported in August, it might be that the Kremlin is “trying to pull off a balancing act.” Treasury data show that Belgium’s holdings of U.S. debt soared by $25 billion in the same period that Russia was liquidating. The Cayman Islands’ share also jumped. Though that didn’t happen this time around, analysts at the Council on Foreign Relations still chalked up the earlier shift to an attempt by Russia to protect against seizure.

Either way, this is a rare circumstance. When Russia, the 11th-largest economy, reportedly owns no Treasuries, but the Philippines, with one-fifth the gross domestic product, is a “major foreign holder” with $31 billion, something is clearly amiss on the foreign relations front. 

Oh, and speaking of geopolitical tensions: Saudi Arabia’s U.S. Treasury holdings just so happened to reach a record high of $169.5 billion at the end of August. With Russia’s hoard zeroed out, perhaps that’s the next debt stash for bond traders to watch.

To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.net

To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.

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