Taiwan remained the fifth-largest creditor in the world at the end of last year by having the fifth-strongest net international investment position of any country, the central bank said on Friday.
Taiwan’s external assets totaled US$2.05 trillion last year, up US$64.18 billion, or 3.2 percent, from 2017, due to an increase in foreign debt securities held by Taiwanese insurance companies, data compiled by the bank showed.
Total external liabilities were US$768.37 billion, down US$33.55 billion, or 4.2 percent, from a year earlier, as foreign institutional investors cut their holdings in local stocks and the value of their shares fell, the central bank said.
As a result, Taiwan’s net international investments rose US$97.73 billion, or 8.3 percent, from a year earlier to US$1.28 trillion at the end of last year, ranking fifth behind Japan, Germany, China and Hong Kong, it said.
Tsai Chiung-min (蔡炯民), deputy head of the bank’s economic research department, said Taiwanese investors preferred bonds over stocks when investing overseas, meaning that global stock market volatility had only a limited effect on their overseas investments.
Foreign institutional investors, on the other hand, put more emphasis on equities than bonds in their portfolios in Taiwan, meaning that a decline in Taiwanese shares reduced the value of their assets, he said.
Overall, Taiwan’s large net international investment position showed that the nation was awash in assets and would help it secure better credit ratings, Tsai said.
Of the net international investments, the central bank held US$466.8 billion, with the remaining US$744.7 billion going to other sectors, including private enterprises and households.
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