Fri, Feb 21, 2014 - Page 13 News List

Net outflow seen on financial account for 14th straight quarter

IN THE BLACK:A growth in exports to China, Hong Kong and ASEAN nations boosted the current account surplus to US$17.14bn in the fourth quarter last year

By Amy Su  /  Staff reporter

The nation’s financial account showed a net outflow for the 14th consecutive quarter, the longest period of outflow in the nation’s history, as local investors purchased more overseas assets on the economic recovery in the US and Europe, the central bank said yesterday.

However, a strong surplus in the current account offset the impact, leading the overall balance of payments to record a surplus of US$2.68 billion in the fourth quarter last year, the bank added.

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

Based on the bank’s latest report, the US$2.68 billion surplus in the balance of payments last quarter was higher than the US$2.61 billion recorded in the third quarter last year, but lower than the US$3.58 billion posted in the fourth quarter of 2012.

The higher net outflow on the financial account — which totaled US$13.88 billion between October and December last year, up from US$11.96 billion a year earlier — was the major factor behind the lower surplus in balance of payments compared with the same period in 2012.

Residents’ overseas portfolio investment exhibited a net outflow of US$9.77 billion last quarter, mainly attributable to greater investment in foreign debt securities by local insurance companies, the report said.

Non-residents’ portfolio investment recorded a net inflow of US$3.83 billion, mostly due to increased foreign investment in Taiwanese stocks.

Central 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 other major global markets saw a similar scenario,” Lin told a media briefing.

The current account saw a surplus of US$17.14 billion in the fourth quarter last year, up from US$16.05 billion the previous year, with a growth in exports to China, Hong Kong and ASEAN nations, the bank said.

The trade surplus widened by US$280 million to US$11.08 billion in the fourth quarter last year, with a larger increase in exports than in imports, the central bank report showed.

For the whole of last year, the overall balance of payments recorded a surplus of US$11.32 billion, down from US$15.48 billion in 2012, the report said.

Notably, residents’ overseas investment totaled US$14.34 billion last year, mainly reflecting stronger investment momentum in China, Lin added.

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