China returned as the United States' largest foreign creditor in March, even as overall foreign central bank holdings of U.S. Treasuries fell, U.S. government data showed on Friday.



China held $1.261 trillion in U.S. Treasuries in March, the most since September and up from $1.224 trillion from February, the Treasury Department data showed.

Japan slipped back to No. 2 with $1.227 trillion, above $1.224 trillion in February.

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Belgium, which as recently as February was the No. 3 holder of U.S. debt, saw its holdings plunge in March by $92.5 billion to $252.8 billion.

Analysts have said the country's holdings had risen due to foreign accumulation of Treasuries held in custody accounts at Belgium-based clearing houses.

"This suggests that the run-up is finally starting to unwind, with Chinese holdings spiking $37.3 billion in March," Gennadiy Goldberg, interest rate strategist with TD Securities, wrote in a research note.