Thu, Nov 21, 2013 - Page 14 News List

Net outflow sustained for longest period in history

By Amy Su  /  Staff reporter

The nation’s financial account showed a net outflow for the 13th consecutive quarter, marking the the longest period of net outflow in the nation’s history, as economic recovery in the US and Europe made more Taiwanese increase overseas investments, the central bank said yesterday.

Accumulated net outflow totaled US$101.98 billion during the 13-quarter period, which also reached the highest amount in Taiwan ever, the bank said.

The balance of payments (BOP), which includes the current, financial and capital accounts, summarizes the net amount of money paid or received by a nation.

Based on the bank’s latest report, the overall BOP posted a surplus of US$2.61 billion in the third quarter, lower than the US$3.7 billion surplus in the same period last year.

The higher net outflow in the financial account — which totaled US$11.09 billion between July and September up from US$8.18 billion a year earlier — was the major factor behind the lower surplus in BOP.

Residents’ overseas portfolio investment exhibited a net outflow of US$12.39 billion last quarter, mainly attributable to greater investment in foreign debt securities by local insurance companies, the report said.

Overall, direct and portfolio investment during the period registered net outflows of US$2.35 billion and US$8.36 billion respectively, bank data showed.

However, bank economic research department deputy chief Lin Shu-hua (林淑華) said the trend of net outflows in the financial account indicated a balancing out, as the nation’s current account continued to post a surplus last quarter.

“Some major global markets, such as Germany, China, Singapore and South Korea, reflected a similar scenario,” Lin told a media briefing.

The current account saw a surplus of US$14.91 billion in the third quarter, up from US$12.3 billion in the previous year, with a larger decline in imports than exports of goods, the bank said.

The goods surplus widened by US$1.82 billion to US$10.43 billion compared with the same period last year, the data showed.

Separately, central bank Governor Perng Fai-nan (彭淮南) said yesterday that the bank is keeping close tabs on the development of Bitcoin, a virtual currency that approximates cash on the Internet.

“We have taken note of the development of Bitcoin and have adopted measures to prevent money laundering through its trading,” Perng said at the legislature’s Finance Committee. “At the moment, the central bank views Bitcoin trading the same way it views trading in precious metals.”

Additional reporting by CNA

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