Fri, Nov 21, 2008 - Page 12 News List

Declining exports in Q3 hit balance of payments

By Crystal Hsu  /  STAFF WRITER, WITH BLOOMBERG

The nation’s current account posted a surplus of US$2.01 billion, while the financial account showed a net outflow of US$6.64 billion in the third quarter, leaving a deficit of US$2.6 billion in the overall balance of payments attributable to falling exports, the central bank said yesterday.

Exports grew by 7.7 percent in value in the third quarter from a year ago, bolstered by a steady increase in exports to neighboring countries, Yeh Rong-tzao (葉榮造), deputy chief of the central bank’s economic research division, told a media briefing.

Yeh said imports expanded by 20 percent from last year because of a substantial increase in the purchase of crude oil, minerals and iron and steel products.

Goods trade recorded a surplus of US$1.51 billion, representing a sharp decrease of US$6.39 billion, down a record 80.9 percent from the previous year, Yeh said.

Meanwhile, the bank said its profit next year would probably be hurt by falling interest rates as the global economy worsens.

The bank expected net income of NT$121.4 billion (US$3.6 billion) next year, governor Perng Fai-nan (彭淮南) told the legislature’s Finance Committee yesterday. That was less than the NT$176.9 billion profit through last month, Perng’s report said.

Income from foreign-currency assets may decline as central banks lower borrowing costs to prevent a prolonged global recession. The US Federal Reserve would probably cut its key rate to zero over the next two months to staunch deflation, JPMorgan Chase & Co said.

The profit in the first 10 months beat a full-year forecast of NT$134.3 billion, Perng’s report said.

“The central bank made some money in operations in foreign-exchange markets,” he said, without giving details.

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