The US remained the largest debtor country to Taiwan’s banking sector for a 27th consecutive quarter in the first quarter of this year, with its exposure rising 8.3 percent from a quarter earlier on the back of an increase in US bonds, the central bank said on Friday.
Data compiled by the central bank showed that outstanding international claims by Taiwanese banks on a direct risk basis to the US stood at US$125.38 billion as of the end of March.
Department of Financial Inspection deputy head Pan Ya-hui (潘雅慧) said that the US Federal Reserve’s launch of a rate hike cycle in March boosted treasury and bond yields, prompting Taiwanese banks to raise their holdings of US debt.
Photo: AFP
China’s exposure to Taiwanese banks was the second-largest, although claims by the local banking sector fell 4.56 percent from a quarter earlier to US$56.77 billion, the central bank said.
COVID-19 lockdowns in several Chinese cities, including Shanghai, Suzhou and Kunshan, made Taiwanese banks more cautious, causing them to reduce exposure to Chinese debtors, Pan said.
As of the end of March, the US and China accounted for 23.71 percent and 10.74 percent of the local banking sector’s exposure respectively, which totaled US$528.7 billion, up 1.26 percent from a quarter earlier, in the wake of an increase in investments in the public sector outside of Taiwan, the central bank said.
After the US and China, Luxembourg remained in third position, with Taiwanese banks’ exposure on a direct risk basis at US$39.72 billion, down 6.11 percent from a quarter earlier and ahead of Hong Kong (US$37.38 billion) and Japan (US$30.86 billion), the data showed.
Australia took the sixth spot with its exposure of Taiwan’s banking sector reaching US$30.81 billion, followed by the Cayman Islands (US$18.62 billion), Singapore (US$17.97 billion), Vietnam (US$16.87 billion) and the UK (US$16.81 billion).
The top 10 debtors accounted for 73.99 percent of Taiwanese banks’ aggregate international claims in the first quarter, the central bank said.
Among the top 10, Australia posted the largest sequential increase in debt of 16.49 percent, while exposure to Japan fell 15.91 percent quarter-on-quarter — the steepest drop, it said.
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