Wed, Nov 22, 2017 - Page 11 News List

Nation posts record 29th straight financial outflow

NOT CONCERNED:Taiwan is one of the few nations to record a long-term current account surplus and such nations tend to register outflows, the central bank said

Staff writer, with CNA

The nation recorded a net outflow of funds in the third quarter of the year, marking the 29th straight quarterly outflow and the longest run in the nation’s history, the central bank said on Monday.

The central bank said that the nation registered a net financial outflow of US$16.93 billion in the July-to-September period, surpassing the US$14.58 billion recorded in the previous quarter.

The central bank’s data showed that the latest figure brought the aggregate outflow over the past 29 quarters to US$334.48 billion, or about NT$10.05 trillion, topping the NT$10 trillion mark for the first time.

The increase can be attributed to a rise in net portfolio investments held overseas by Taiwanese, which rose in the third quarter by US$22.97 billion from a year earlier, while local insurance firms also raised their securities and bond holdings in foreign markets, the central bank said.

However, as foreign institutional investors cut their local equity holdings in the third quarter, net portfolio investments by non-residents dropped by US$10.31 billion, the central bank said.

The continued outflow has fueled concerns that investors would continue to move funds out of the nation and into US dollar-denominated assets, particularly as the US Federal Reserve began raising interest rates this year and is expected to raise its key rate again next month.

In an effort to assuage such concerns, the central bank said Taiwan is one of the few nations to record a long-term current account surplus and that in such circumstances nations tend to register net outflows.

Other nations with a long-term current account surplus and net outflows include China, Japan, Singapore, South Korea, Germany, Malaysia and Russia, the central bank said.

The current account mainly measures exports of merchandise and services.

The nation recorded a current account surplus of US$20.51 billion in the third quarter, up US$4.27 billion, or 26.3 percent, from a year earlier on the back of improving demand as the global economy continued to recover.

The nation’s trade surplus in merchandise in the third quarter rose by US$5.89 billion from the previous quarter to US$22.9 billion, the central bank said.

Travel expenses totaled US$5.037 billion, while the central bank recorded US$2.87 billion in travel income, which resulted in a travel income deficit of about US$2.17 billion, the seventh consecutive quarterly deficit.

The increase in travel income reflected the peak overseas travel season, particularly to Japan, the central bank said.

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