Domestic banks’ exposure to China rose to a record-high level again at the end of last quarter, making China Taiwan’s second-largest debtor, the central bank said in a report released on Saturday.
That was despite a rarely seen decline in the nation’s total international claims. The figure decreased by 2.31 percent, or US$5.36 billion, to US$226.39 billion as of the end of June, from US$231.75 billion three months ago, according to the central bank’s tally.
It was the first time Taiwan’s international claims have shown a sequential decline since the global financial crisis in 2008.
International claims comprise all claims on non-residents in all currency units and foreign currency claims on residents.
“Taiwanese redeemed more overseas funds in the second quarter, mainly due to concerns over the US Fed’s quantitative tapering,” Su Dao-min (蘇導民), deputy head of the central bank’s banking examination department, said at a press conference.
Based on the central bank’s statistics, Taiwanese redeemed at least US$3.6 billion in overseas funds during the April-to-June period.
However, claims on China totaled US$30.85 billion at the end of June, up US$398 million from the level recorded at the end of March. The nation’s claims on China remained the second-largest of all countries, behind claims on Luxembourg, the bank said in its quarterly report.
Domestic banks’ exposure to China may rise further amid increased financial exchanges between the two sides, the central bank said.