Mon, Mar 01, 2021 page15

• Nation posts record trade surplus in Q4

  VIRUS ECONOMY: Taiwan recorded an increased current account surplus largely due to demand for devices used for remote working and online learning, the central bank said

  • Staff writer, with CNA
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  Taiwan posted a record balance of payments surplus in the fourth quarter of last year, as the central bank intervened in the local foreign-exchange market to reduce volatility faced by the New Taiwan dollar, the central bank said on Friday.

  Last quarter, the central bank registered a US$27.84 billion increase in asset reserves, or balance of payments surplus — a new quarterly high — as the bank sought to slow the appreciation of the NT dollar by buying US dollars.

  The nation’s forex reserves repeatedly hit new highs due to the interventions, it said.

  

  The central bank in Taipei is pictured in an undated photograph. The bank on Friday reported that Taiwan posted a record balance of payments surplus of US$27.84 billion in the fourth quarter of last year, as the central bank intervened in the local foreign-exchange market to reduce volatility faced by the NT dollar.

  Photo: Allen Wu, Taipei Times

  Meanwhile, Taiwan recorded an increased current account surplus last quarter, largely due to a strong showing by tech exports on solid global demand for devices used for remote working and online learning amid the COVID-19 pandemic, the bank said.

  The current account surplus for the October-to-December period was US$27.33 billion after the merchandise trade surplus expanded to US$23.04 billion last quarter, up US$8.9 billion from a quarter earlier, it said.

  Old-economy industries’ exports also picked up in the fourth quarter last year, helping them climb out of a downturn caused by the pandemic, the bank’s data showed.

  The current account measures a country’s merchandise and service exports and imports, with a surplus showing that a nation has more exports than imports.

  Taiwan’s services account registered a surplus of US$1.38 billion, reversing a US$1.02 billion deficit over the same period a year earlier, and reflecting an increase in freight proceeds and a drop in travel deficit.

  The nation had a net fund outflow of US$2.22 billion on the fourth-quarter financial account, which measures the flow of direct investment and portfolio investment, marking the 42nd consecutive quarter of net fund outflows, the bank said.

  However, the quarterly net fund outflow fell from US$10.96 billion a year earlier.

  Resident direct investment abroad increased US$3.54 billion, while foreign direct investment increased US$3.56 billion, data showed.

  Portfolio investments held overseas by Taiwanese interests registered a net increase of US$6.29 billion on the back of a rise in debt securities investments by banks and insurance companies, while portfolio investments by foreigners in Taiwan recorded a net increase of US$4.38 billion, the bank said.

  Over the past 42 quarters, Taiwan has had a net fund outflow of US$528.63 billion, which is equivalent to seven years of tax revenue.

  Countries with high current account surpluses tend to show net fund outflows, the bank said, citing Germany, Japan, Singapore, South Korea and Thailand, in addition to Taiwan.

  Last year as a whole, Taiwan recorded a current account surplus of US$94.28 billion, a new high and a net fund outflow of US$50.04 billion on the financial account, while the central bank’s asset reserves increased by US$48.34 billion.
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