U.S. net capital inflows increase

Net overall capital flows into the U.S. rose to $64.1 billion in February from a revised $35.7 billion in January, the Treasury Department said.

The inflow was enough to cover February’s trade deficit of $62.3 billion, and eased some concern that the credit crisis and economic slowdown would dry up foreign investment.

Net long-term capital inflows, excluding swaps, totaled $72.5 billion, compared with a revised $57.1 billion inflow in January. The February net long-term inflow was the largest since May 2007.

The U.S. had a net $73.1-billion inflow of private capital in February, after January’s revised $42.5-billion outflow.

But the report showed a net $9-billion outflow of capital in February by governments, central banks and other official institutions, after a revised $78.3 billion inflow in January.

Net foreign purchases of U.S. Treasury bonds and notes fell to $20.60 billion in February versus $35.97 billion in January.

Japan remained the largest holder of U.S. Treasury debt in February with a steady $586.6 billion in total securities. China, the No. 2 holder of U.S. Treasuries, decreased its holdings to $486.9 billion from $492.6 billion in January.