In the current account, both exports and imports continued to record fresh quarterly highs. Exports grew by 14.5% over the same period last year, supported by increased external demand for information and telecommunications products, electronics, and machineries. Imports rose 19.5% year on year, boosted by sustained high international prices of oil and other raw materials and growth in export-derived demand. Greater increases in imports than in exports led to a year-on-year decline of US$1.97 billion in goods trade surplus to US$5.90 billion.

The services account recorded a surplus of US$0.81 billion, an increase of US$0.27 billion from the same period last year, mainly due to gains in net proceeds from merchanting and travel receipts. The US$3.47 billion surplus in the income account represented a year-on-year increase of US$0.15 billion, mainly attributable to income increases in foreign exchange asset investment. Current transfer deficit was US$1.16 billion, widening by US$0.44 billion over the same period last year, mainly accounted for by donations for Japan's March 11 earthquake relief. In sum, the current account surplus shrank by US$1.99 billion, or 18.1%, over the same period last year, as surplus increases both in services and income accounts were offset by greater declines in the goods trade surplus and a larger current transfer deficit.

In the financial account, direct and portfolio investment registered net outflows of US$2.46 billion and US$7.48 billion, respectively. Residents' portfolio investment abroad exhibited a net outflow of US$12.79 billion, mainly due to rises in insurance companies' investment in foreign debt securities and residents' investment in foreign mutual funds. Non-residents' portfolio investment turned to a net inflow of US$5.31 billion, mainly because of foreign capital inflows for investment in domestic stock and bond markets. Other investment exhibited a net inflow of US$4.58 billion, mainly attributable to increases in foreign borrowing by the banking sector.

For the first half of this year, the current account recorded a surplus of US$19.75 billion, the financial account exhibited a net outflow of US$7.72 billion, and the overall balance registered a surplus of US$9.49 billion, reflecting an increase in the Bank's reserve assets.

Notes: 1. The next balance of payments data will be released at 16:20 p.m. on
November 21, 2011.
2. For the release schedule for the next six months, please check the CBC website at http://www.cbc.gov.tw/ct.asp?xItem=30164&ctNode=515&mp=2.