The US remained the largest debtor nation to Taiwan’s banking sector for the 30th consecutive quarter as of the end of December last year, with Taiwanese banks’ exposure to the US market hitting a record high, the central bank said on Friday.
Data compiled by the central bank showed that outstanding claims by Taiwan’s banking sector to the US totaled US$139.36 billion, up US$4.52 billion, or 3.35 percent, from the end of September, marking the fourth quarter the exposure has moved higher on a quarter-on-quarter basis.
Pan Ya-hui (潘雅慧), deputy head of the central bank’s Department of Financial Inspection, said the exposure value growth to the US is the highest among the top 10 debtor nations to the local banking sector.
Photo: CNA
The US Federal Reserve’s launch of an aggressive rate hike cycle to boost US Treasuries and bond yields made investment instruments more attractive, which pushed up investments from Taiwan, Pan said.
The banking sector’s outstanding international claims totaled US$522.8 billion at the end of December, a 2 percent rise from the previous quarter, central bank data showed.
The increase largely reflected growth of lending to non-bank private institutions and the public sector, the central bank said.
The second-largest debtor nation as of December was China — as it was a quarter earlier — exposure to which stood at US$48.27 billion, up US$493 million or 1.03 percent from the previous quarter, the central bank said.
Hong Kong placed third, although the Taiwanese banking industry’s exposure to the territory fell US$1.07 billion, or 3.02 percent, from a quarter earlier to US$34.23 billion at the end of December.
Hong Kong saw the steepest absolute decline in exposure from Taiwanese banks among the top 10 debtor nations in the fourth quarter in the wake of a drop in interbank loans, Pan said
Luxembourg placed fourth, with exposure from the local banking sector at US$33.60 billion, down 5.41 percent from a quarter earlier, ahead of Japan, exposure to which hit US$32.26 billion, up 9.03 percent from a year earlier, the second-largest absolute increase after the US.
The increase in exposure to the Japanese market reflected a 9.23 percent jump in the value of the Japanese yen against the US dollar, meaning that value increased as exposure to the country was converted from the yen to the greenback, Pan said.
Australia took sixth place, as exposure from the local banking sector stood at US$29.05 billion at the end of December, up 2.71 percent from a quarter earlier, followed by Singapore (US$17.96 billion, up 0.83 percent), Vietnam (US$17.34 billion, down 4.57 percent), the UK (US$17.13 billion, down 3.77 percent), and the Cayman Islands (US$16.99 billion, down 1.16 percent).
The decline in exposure to Vietnam came as the country saw an economic slowdown in the second half of last year, and Taiwanese banks scaled back their lending to the country.
Taiwanese banks’ exposure to the top 10 debtors reached US$386.19 billion, up 2 percent from a quarter earlier, accounting for 73.86 percent of the banking sector’s outstanding international claims, the central bank said.
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