The US remained Taiwan’s largest debtor as of the end of June, with the local banking sector’s exposure to US entities on the rise, despite trade tensions between the US and China, the central bank said.
Outstanding claims by Taiwanese banks from the US totaled US$79.11 billion on a direct-risk basis, up from US$74.21 billion at the end of March, data compiled by the central bank showed.
On an ultimate-risk basis, which calculates a country’s consolidated debts after risk transfers, Taiwanese banks’ exposure to the US stood at US$74.92 billion, up from US$71.61 billion in the first quarter.
The increase largely reflected the foreign-exchange fluctuations during the three-month period, as well as Taiwanese investors’ steady investments in bonds and securitized financial instruments, analysts said.
China came in second with Taiwanese banks extending US$45.2 billion in loans to the Chinese market as of the end of June on a direct-risk basis, up from US$43.51 billion in the first quarter, and about US$67.90 billion on an ultimate-risk basis, compared with US$67.21 billion a quarter earlier, the central bank said.
Taiwanese banks raised their investments in securities products to boost their exposure, while banks in Taiwan also increased their loans extended to their subsidiaries operating in China, it said.
Overall, outstanding international claims by banks in Taiwan rose 4.38 percent quarterly to US$435.3 billion on a direct-risk basis, while exposure on an ultimate-risk basis also rose 3.98 percent to US$414.8 billion.
It was the second consecutive quarter in which Taiwan’s outstanding international claims have climbed, government data showed.
After the US and China, Luxembourg was the third-largest debtor to Taiwan on a direct-risk basis as of the end of June, with Taiwanese banks’ exposure reaching US$39.74 billion.
Hong Kong placed fourth with US$37.88 billion in exposure, followed by Japan with US$32.66 billion, Australia with US$21.97 billion, the Cayman Islands with US$17.99 billion, the UK with US$17.68 billion, Singapore with US$16.90 billion and the British West Indies with US$13.57 billion.
Bank exposure to Taiwan’s top 10 debtors at the end of June stood at US$322.7 billion, accounting for 74.14 percent of the country’s total international claims on a direct-risk basis, the central bank said.
The global non-bank private sector accounted for 62.63 percent of Taiwan’s total international claims on a direct-risk basis, with the banking industry making up 30.63 percent and the public sector 6.99 percent, the central bank said.
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