updated 11/17/2009 9:39:10 AM ET 2009-11-17T14:39:10

Foreign demand for long-term U.S. financial assets rose in September as China and other countries boosted their holdings of Treasury securities.

Continued strong foreign demand for U.S. debt is critical to financing America's soaring budget deficits and keeping American interest rates low enough to support a recovery from the recession.

The Treasury Department says foreigners purchased $40.7 billion more in assets than they sold in September, the biggest jump since June. The September gain compared with a revised $34.2 billion increase in holdings in August.

China, the largest foreign holder of U.S. Treasury securities, boosted its holdings by $1.8 billion to $798.9 billion in September.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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