BALANCE OF PAYMENTS
PRESS RELEASE Release Date: Nov. 21, 2005
BALANCE OF PAYMENTS
For the third quarter of 2005, the current account registered a surplus of US$0.88 billion, while the financial account recorded a net outflow of US$2.51 billion. The Bank’s reserve assets increased by US$0.5 billion.
In terms of the current account, the steady growth of the global economy led exports to grow by 7.1% over the same period last year with the highest quarterly volume on record. Imports grew by 10.3% with the third highest quarterly volume, mainly due to an increase 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$4.05 billion, showing a decline of US$0.91 billion from a year earlier. The services account deficit increased significantly by US$1.75 billion over the same quarter last year to US$2.95 billion, mainly caused by a drop in merchanting trade surplus and an increase in travel spending. Income surplus was US$0.86 billion, decreasing significantly by US$1.57 billion from a year ago. The lower income surplus was mainly because the U.S. offered a special low tax rate on homebound remittances of overseas earnings, and cash dividend distribution by local listed companies boosted non-residents’ income from investment in equity securities, both of which contributed to a historically highest level of income payments for a quarter. Current transfer deficit increased by US$0.23 billion from a year earlier to US$1.08 billion, mainly caused by an increase in residents’ outward remittances to their 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$0.88 billion, representing a decrease of US$4.45 billion or 83.5% over the corresponding quarter last year.
With regard to the financial account, direct investment and portfolio investment exhibited respective net outflows of US$0.3 billion and US$6.32 billion. Portfolio investment abroad by residents posted a net outflow of US$9.68 billion, mainly attributable to residents’ increased investment in foreign securities through banks’ earmarked trust funds and large portfolio investment abroad by local insurance companies and banks’ offshore banking units pursuing higher returns. Portfolio investment by non-residents recorded a net inflow of US$3.36 billion, as domestic enterprises issued a sum of US$5.48 billion in American depository receipts and European convertible bonds. Other investment showed a net inflow of US$4.11 billion, mainly because the CBC increased repurchase agreement transactions, which caused the Bank’s short-term foreign liabilities to increase by US$3.64 billion.
For the first three quarters of this year, the current account showed a surplus of US$7.04 billion, the financial account exhibited a net inflow of US$8.47 billion, and the Bank’s reserve assets increased by US$19.43 billion.
Tables & Graphs [ XLS ]
Notes: 1. The next balance of payments data will be released at 16:20 p.m. on February 20, 2006.
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.