Sovereign wealth funds in the Middle East are growing increasingly concerned about the health of the US Treasury market, raising questions about whether they will remain such active buyers of US government debt.
Middle Eastern buyers are the fifth-largest investors in Treasuries after China, Japan, the UK and Caribbean banking centres, and their appetite could prove critical to US government plans to issue mountains of debt to fund stimulus efforts.
So far there is little sign of a flight from the dollar or from Treasuries, but senior executives at several sovereign funds in the region say the US Treasury has been conducting a dialogue to reassure Middle Eastern investors that US government debt still offers value.
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