SEMICONDUCTOR BOOST:
The figure rose despite slowing export growth and the country recording 45 consecutive quarters of capital outflows, the central bank said.

  • By Crystal Hsu / Journalist

Taiwan’s balance of payments posted a current account surplus of $ 26.1 billion in the last quarter as exports remained strong, although export growth slowed from the previous year due to the surge. commodity prices and imports of capital goods, the central bank said on Friday.

The balance of payments totals all transactions made by individuals, businesses and government agencies in a country with foreign entities. This figure is commonly used as a benchmark for monetary policy making.

Taiwan’s current account surplus fell $ 3.47 billion from a year earlier, after the merchandise trade surplus fell by $ 1.96 billion, the central bank said, adding that the decline was mainly due to soaring international commodity prices and aggressive purchases of capital goods by local firms.

Photo: Tyrone Siu, Reuters

Taiwanese semiconductor manufacturers have stepped up capacity expansion to meet growing demand from overseas customers.

The most recent government data showed that semiconductor equipment imports reached US $ 9.2 billion in the third quarter, up US $ 3.7 billion from the previous year.

In the first nine months of this year, the current account surplus peaked at $ 81.02 billion, as the Taiwanese economy generated high overseas sales of electronic components and machinery, among others, said the central bank.

In addition, the surplus on the services account increased by about $ 590 million year-on-year to $ 2.31 billion in the third quarter due to an increase in freight receipts, the central bank said.

Local shipping lines have reaped record profits amid container shortages and port congestion induced in part by global lockdowns to contain the COVID-19 pandemic, he said.

On financial transactions, cash outflows widened to a record $ 27.1 billion in the last quarter, the 45th consecutive quarterly increase, from $ 18.36 billion a year earlier and 1. $ 38 billion from the previous quarter, the central bank said.

The central bank said the growth came as domestic life insurers increased their holdings in bonds and securities abroad and foreign portfolio managers reduced their holdings of local stocks.

Overseas life insurance investment showed a net increase of US $ 14.74 billion last quarter, while foreign investment in the local market registered a net decrease of US $ 7.95 billion , he said, qualifying the outflows as “commons” for export-oriented economies.

The outflows occur when the local market cannot meet the needs of financial institutions, prompting them to convert current account surpluses into foreign currencies and positions into foreign financial assets to generate returns, the central bank said.

Other economies with current account surpluses, such as Germany, Japan, Singapore, South Korea and Thailand, also regularly experience cash outflows, he added.

In the past 45 quarters, net cash outflows totaled $ 594.01 billion, equivalent to seven years of Taiwan’s tax revenue.

CNA Supplementary Reports

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