China’s currency regulator on Wednesday urged the U.S. to take steps to keep confidence in the dollar and avoid default. The message, posted on the regulator’s website, was a response to questions about whether Beijing would be unloading Treasuries in the event of a downgrade of U.S. Treasuries.
Reuters reported that the State Administration of Foreign Exchange said on its website, “We hope the U.S. government will take responsible policies and measures to boost global financial market confidence and respect and protect the interests of investors.” The action indicates the concerns, not just of China, but of other big investors in U.S. debt as politicians continue to dispute ways to deal with the debt ceiling. Default and/or downgrade will occur should they fail to take appropriate actions.