China, the biggest buyer of US Treasury securities, has increased its holdings for a fourth straight month.

The US Treasury Department said yesterday that China's holdings of Treasury debt rose 2.6 percent in October to US$906.8 billion. That's the highest level in 11 months.

Overall, foreign holdings of Treasury securities rose 1.1 percent to US$4.3 trillion. That indicates that other nations still have a strong appetite for Treasury debt even as the US government continues to run US$1 trillion-plus annual budget deficits.

Of total foreign holdings, US$2.85 trillion, or two-thirds, is held by foreign governments and central banks.

Japan, the second-largest holder of Treasury debt, expanded its portfolio to US$877.4 billion, a 1.5 percent rise from October.

Britain, ranked third, boosted its holdings by 4 percent to US$477.6 billion. Oil exporting nations trimmed their holdings of Treasury securities by 3.4 percent to US$213.9 billion.

The federal budget deficit surged to an all-time high of US$1.41 trillion in 2009. It dipped slightly in the 2010 budget year that ended on September 30 to US$1.29 trillion - the second-highest deficit on record.

Many analysts now expect this year's deficit to top the previous US$1.41 trillion record.

Economists had earlier said they expected the federal deficit to decline in the current budget year.

However, they started boosting their estimates after US President Barack Obama reached agreement with Republican leaders last week for a major tax cut package for next year.