Sat, Dec 29, 2018 - Page 12 News List

Lending to China continues to fall as yuan weakens against the US dollar

By Kao Shih-ching  /  Staff reporter

Loans extended by Taiwanese banks to China continued to decline in the third quarter of this year, due to the Chinese yuan weakening against the US dollar, the central bank said yesterday, adding that it had not seen any signs that the US-China trade dispute affected lending exposure.

Outstanding international claims by Taiwanese banks on a direct-risk basis to China totaled US$44.32 billion as of the end of September, down 0.66 percent from US$44.61 billion as of the end of June, data compiled by the central bank showed.

The figure stood at US$46.91 billion at the end of March.

In the third quarter, the yuan fell 3.8 percent quarter-on-quarter against the US dollar, which dragged down the value of some yuan-denominated loans, Department of Financial Inspection Deputy Director-General Walt Lin (林華亭) told a news conference in Taipei.

On an ultimate-risk basis, which calculates a country’s consolidated debts after risk transfers, loan exposure to China totaled US$69.2 billion as of the end of September, down 2.19 percent from US$70.75 billion at the end of June, the data showed.

“So far, we have not seen trade disputes affect the exposure to China, and even if some companies relocate their plants to other nations, their loans would not be affected,” Lin said.

The central bank’s data showed that China remained the nation’s second-largest debtor after the US, where Taiwanese banks’ exposure totaled US$70.06 billion in the third quarter on a direct-risk basis.

On a direct-risk basis, Taiwanese banks’ aggregate international claims totaled US$407.2 billion, up US$5.5 billion, or 1.39 percent, from the previous quarter.

Non-bank private firms made up 63.13 percent of Taiwan’s exposure, banks accounted for 29.92 percent and foreign public entities represented 6.94 percent as of the end of September, the central bank said.

On an ultimate-risk basis, aggregate international claims by Taiwanese banks also rose 1.19 percent to US$389.83 billion from the previous quarter, it said.

After the US and China, Luxembourg was the nation’s third-largest debtor on a direct-risk basis, owing US$38.26 billion, followed by Hong Kong with US$37.18 billion and Japan with US$30.46 billion.

Australia followed with US$19.77 billion, then came the Cayman Islands with US$17.1 billion, the UK with US$15.84 billion, Singapore with US$15.26 billion and the British West Indies with US$14.23 billion, data showed.

These top debtors, which remained in the same order from three months earlier, accounted for 74.29 percent of Taiwan’s total international claims on a direct-risk basis, the central bank said.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top