Fund outflows from Taiwan reached a record high in the first quarter of this year, marking the 47th consecutive quarter of cash transferring out of the country, as the central bank attributed the pattern to overseas bond investments by Taiwanese financial institutions.
It was the third straight quarter that Taiwan reported record high fund outflows.
Data compiled by the central bank showed net outflows in Taiwan’s financial account — which measures the flow of direct investment and portfolio investment — totaled US$32.22 billion in the January-to-March quarter, up from US$18.56 billion a year earlier.
Photo: CNA
The first quarter’s fund outflow also beat the US$31.78 billion recorded in the fourth quarter of last year, the central bank’s statistics showed.
A spike in US Treasury yields prompted many Taiwanese financial institutions to park funds overseas after the US Federal Reserve introduced a rate-hike cycle that began in March, bank officials said.
The increase in net fund outflows came after portfolio investments abroad posted a net asset increase of US$49.92 billion, as insurance companies raised their investment in debt securities overseas, they said.
Out of the US$49.92 billion, residents’ portfolio investment abroad posted a net increase of US$35.21 billion on the back of a rise in overseas debt securities investment by insurance companies as well as other financial institutions, bank officials said.
Non-residents’ portfolio investment recorded a net fall of US$14.72 billion, as foreign investors reduced equity holdings in the local stock market in the first quarter, when the TAIEX shed 525.37 points, or 2.88 percent, after foreign institutional investors sold a net NT$459 billion (US$15.48 billion).
Over the past 47 quarters, accumulated net fund outflows hit US$660.51 billion, equivalent to more than seven years of Taipei’s tax revenue.
Addressing concerns that investors could continue to move funds out of the country and into US dollar-denominated assets, the central bank said that net financial account outflows are common among countries like Taiwan, which have a long-term current account surplus.
Other countries, like Japan, Singapore, South Korea and Germany, which have all had such a surplus, have also tended to record net financial account outflows, the bank said.
A current account mainly measures exports and imports of merchandise and services.
Taiwan in the first quarter recorded a current account surplus of US$30.68 billion, up US$4.85 billion from a year earlier, reporting a US$20.47 billion surplus in commodity trade, up US$1.7 billion from a year earlier, due to solid global demand for technology products amid a digital transformation.
Additionally, service trade reported a surplus of US$4.34 billion, a new quarterly high, due to increases in cargo shipping revenue amid tight supply, the central bank said.
Meanwhile, the central bank’s reserve assets rose only US$260 million, as the bank entered the foreign exchange market by selling US dollars to cap the depreciation of the New Taiwan dollar against a strong greenback.
On Ireland’s blustery western seaboard, researchers are gleefully flying giant kites — not for fun, but in the hope of generating renewable electricity and sparking a “revolution” in wind energy. “We use a kite to capture the wind and a generator at the bottom of it that captures the power,” said Padraic Doherty of Kitepower, the Dutch firm behind the venture. At its test site in operation since September 2023 near the small town of Bangor Erris, the team transports the vast 60-square-meter kite from a hangar across the lunar-like bogland to a generator. The kite is then attached by a
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
TARIFF CONCERNS: Semiconductor suppliers are tempering expectations for the traditionally strong third quarter, citing US tariff uncertainty and a stronger NT dollar Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar. Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter. The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then
RSS