Fri, Nov 23, 2018 - Page 12 News List

Central bank reports 33rd straight quarter of outflow

Staff writer, with CNA

More funds for investment were remitted out of Taiwan than were remitted into it in the third quarter for the 33rd consecutive quarter, the longest run in the nation’s history, the central bank said.

The net fund outflow in Taiwan’s financial account, which measures the flow of direct investment and portfolio investments, was US$7.83 billion, bringing the aggregate net outflow for the 33 quarters to US$386.42 billion, data compiled by the central bank showed on Tuesday.

However, the net fund outflow for the July-to-September period was the lowest since the second quarter of 2013, when the figure stood at US$6.66 billion, the data showed.

Net securities assets held by overseas Taiwanese residents rose by US$11.57 billion last quarter from a year earlier, largely because of large investments by life insurance companies to purchase foreign bonds, the central bank said.

Meanwhile, net direct investments made by Taiwanese residents overseas were also up by US$4.46 billion in the third quarter from a year earlier, central bank data showed.

The continued outflow in the financial account fueled mounting concerns that investors will keep moving funds out of the country and into US dollar-denominated assets.

However, the bank dismissed the concerns, saying that Taiwan is one of the few countries in the world to have a long-term current-account surplus, and countries with such surpluses tend to register net financial-account outflows.

Other countries following a similar pattern include Japan, Singapore, South Korea, Germany and Russia, it said.

The current account mainly measures a country’s merchandise and service exports and imports.

In the third quarter, the current-account surplus totaled US$14.04 billion, down US$7.67 billion, or 35.3 percent, from a year earlier, the central bank said.

The decline largely reflected an increase in machinery imports, in particular in the semiconductor industry, while a spike in international crude oil prices also boosted the value of imports, the bank said.

The current-account surplus for the third quarter fell to a low since the third quarter of 2014, when the figure was US$13.87 billion, it said.

Taiwan’s surplus in merchandise trade fell US$7.44 billion from a year earlier to US$16.3 billion in the third quarter, with exports up US$2.92 billion and imports up US$10.37 billion year-on-year in the quarter, the data showed.

The service deficit in the third quarter stood at US$2.42 billion, down US$4.7 billion, the central bank said, adding that the deficit was largely because residents were keen to travel overseas.

In the first nine months of the year, the current-account surplus totaled US$50.06 billion, the central bank said.

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