As of August 19, foreign official institutions held approximately $373 billion in the Federal Reserve's foreign reverse repurchase pool, an increase of about $56 billion since August 5, marking the largest two-week increase since October 2022.
Combined with the recent global sell-off of long-term bonds, this can be interpreted as increased demand from overseas official funds for short-duration, highly liquid dollar assets. Meanwhile, foreign central banks still net sold nearly $10 billion in US Treasury bonds in June, and the size of overseas official US Treasury bonds held by the New York Fed has also fallen to a multi-year low, reflecting continued strong demand for dollar cash, but also greater caution regarding the duration risk of long-term US Treasury bonds.
