U.S. top debtor of Taiwan for 18th consecutive quarter

CNA file photo

TAIPEI (CNA) — The United States was the largest debtor of Taiwan for the 18th consecutive quarter at the end of December, as Taiwanese banks’ exposure to Washington hit a new high, according to the central bank.

Data compiled by the central bank showed that outstanding international claims by Taiwanese banks on the U.S. as of the end of December totaled US$89.75 billion, the highest level in history on a direct risk basis, up from US$79.25 billion at the end of September.

The central bank said the growth in exposure to the U.S. market largely reflected an increase in funds Taiwanese banks parked in the U.S. Federal Reserve and a rise in interbank loans to their U.S. counterparts.

On an ultimate risk basis, which calculates a country’s consolidated debts after risk transfers, Taiwanese banks’ exposure to the U.S. stood at US$86.36 billion as of the end of December, up from US$77.08 billion a quarter earlier. The exposure to Washington on an ultimate risk basis was also the highest among Taiwan’s debtor nations.

China came in second, as outstanding international claims by Taiwanese banks rose to US$47.44 billion at the end of December on a direct risk basis, up from US$43.84 billion a quarter earlier, the central bank’s data showed.

Taiwan banks’ exposure to China on an ultimate risk basis also rose to US$68.07 billion at the end of December from US$65.09 billion at the end of September, the data indicated.

The central bank said the higher exposure to China came from an appreciating Chinese yuan and an increase in investment in China during the three-month period.

As of the end of December, outstanding international claims by Taiwanese banks hit US$454 billion at the end of December, up 4.56 percent from the end of September, the data showed.

After the U.S. and China, Luxembourg came in third, with Taiwanese banks’ exposure on a direct risk basis hitting US$41.46 billion at the end of December, up from US$39.43 billion as of September, ahead of Hong Kong (US$35.78 billion) and Japan (US$33.13 billion).

Australia took the No. 6 title, with Taiwanese banks’ exposure at US$23.98 billion, followed by the United Kingdom (US$17.84 billion), the Cayman Islands (US$17.57 billion), Singapore (US$16.12 billion), and the British West Indies (US$12.52 billion).

Bank exposure to Taiwan’s top 10 debtors at the end of December stood at US$335.6 billion, accounting for 73.93 percent of the country’s total international claims on a direct risk basis, the central bank said.

The non-banking private sector worldwide accounted for 61.07 percent of Taiwan’s total international claims on a direct risk basis, with the banking industry making up 30.16 percent and the public sector representing 8.76 percent, the central bank said.

Read More from The China Post