Taiwan suffers deficit in second quarter balance of payments


TAIPEI, CNA

Taiwan’s balance of payments for international transactions registered a rare deficit of US$1.89 billion in the second quarter of this year, the Taipei-based Central Bank of China (CBC) reported yesterday.

Taiwan last registered an international payment deficit in the third quarter of 2004, when US$1.49 billion was reported, a CBC official said.

Noting that the total payment deficit during the first half of this year reached US$1.52 billion, the official attributed the deficit mainly to massive overseas securities investments of US$28.17 billion made by local citizens.

Due to a large interest rate difference between the new Taiwan dollar and the U.S. dollar, Taiwanese people, local investment institutions and insurance companies prefer to invest outside Taiwan, the official explained.

The official added that local citizens invested US$17.21 billion in foreign stocks and bonds during the second quarter of this year, setting the highest-ever single-quarter record.