South Korea is now the world’s 19th largest holder of U.S. Treasury bonds, down eight notches from eleventh place a year ago.

The U.S. Department of the Treasury said Korea’s holdings of Treasury bonds shrank 30 percent to 27 billion U.S. dollars late 2008 from 39 billion dollars in late 2007.

The reduction is attributable to the fact that Korea sold U.S. state bonds to procure more U.S. dollars to prop up the foreign exchange market amid the global financial crisis.

China is the world’s largest possessor of U.S. state bonds. Its holdings jumped 45 percent to 690 billion dollars in 2008.