BALANCE OF PAYMENTS
PRESS RELEASE Release Date: Aug. 19, 2005
BALANCE OF PAYMENTS
For the second quarter of 2005, the current account registered a surplus of US$1.71 billion, while the financial account recorded a net inflow of US$2.46 billion. The Bank’s reserve assets increased by US$6.45 billion.
In terms of the current account, both exports and imports reached their highest quarterly volumes. Exports grew by 6.2% over the same period last year, mainly buoyed by exports to neighboring Asian countries. Imports grew by 10.9%, mainly due to an increase in demand for capital equipment and in imports of oil caused by surging international oil prices. Because imports increased by a larger amount than exports, surplus on goods shrank to US$2.96 billion, showing a decline of US$1.56 billion from a year earlier. The services account deficit increased significantly by US$1.93 billion over the same quarter last year to US$2.26 billion, mainly caused by a sharp drop in merchanting trade surplus and an increase in traveling spending. Income surplus was US$2.2 billion, decreasing by US$0.01 billion from a year ago, mainly due to non-residents’ outward remittances of income from investment in equity securities. Current transfer deficit increased by US$0.32 billion from a year earlier to US$1.19 billion, mainly caused by an increase in outward remittances to overseas relatives. In total, a decrease in goods surplus and income surplus combined with an increase in services deficit and current transfer deficit caused the current account surplus to decline to US$1.71 billion, representing a decrease of US$3.82 billion or 69.1% over the corresponding quarter last year.
With regard to the financial account, direct investment exhibited net outflows of US$0.81 billion, while portfolio investment showed net inflows of US$1.38 billion. Portfolio investment abroad by residents posted a net outflow of US$7.63 billion, mainly attributable to residents’ increased investment in foreign securities through banks’ earmarked trust funds and large portfolio investment abroad by local insurance companies pursuing higher returns. Portfolio investment by non-residents recorded a net inflow of US$9.01 billion as foreign investors registered large net purchases in domestic stock markets. Other investment showed a net inflow of US$1.89 billion. This was mainly because in response to the rate hikes by the U.S. Federal Reserve, the Bank increased repurchase agreement transactions for higher returns on its foreign exchange reserves, which caused the Bank’s short-term foreign liabilities to increase by US$6.79 billion.
For the first half of this year, the current account showed a surplus of US$6.13 billion, the financial account exhibited a net inflow of US$9.68 billion, and the Bank’s reserve assets increased by US$18.93 billion.
Tables & Graphs [ XLS ]
Notes: 1. The next balance of payments data will be released at 16:20 p.m. on November 21, 2005.
2. For the release schedule for the next six months, please check the CBC website at http://www.cbc.gov.tw/EngHome/ESDDS/calacal.asp.