Taipei, Oct 2 (CNA) The United States remains the largest debtor to Taiwanese banks, with local exposure reaching an all-time high of $113.28 billion in the second quarter of 2021.
According to data from the Central Bank of the Republic of China released earlier this week, the outstanding international claims of the banking sector stood at $504.1 billion at the end of June, up 3.76% from in the previous quarter.
Local banks’ exposure to US debt on a direct risk basis saw a quarterly increase of US$11.8 billion, with the central bank citing investments in the US market and Taiwanese deposits in US banks for l ‘increase.
Exposure on an ultimate risk basis – which calculates a country’s consolidated debt after risk transfers – fell from a total of $99.18 billion in the first quarter to $108.83 billion.
China remained in second place, with direct risk exposure up US$3.3 billion to US$56.78 billion in the second quarter. The increase in borrowings also saw exposure on an ultimate risk basis increase from US$68.98 billion to US$69.70 billion.
The central bank attributed the change in part to a stronger Chinese yuan, as well as investments in the wake of China’s efforts to control COVID-19 in the first half of the year.
However, he added that recent debt problems faced by real estate developer Evergrande in China had reduced the willingness of Taiwanese banks to invest more.
Luxembourg came third with US$44.66 billion on a direct risk basis, followed by Hong Kong (US$35.06 billion), Japan (US$33.46 billion), Australia (US$25.48 billion), Cayman Islands (US$20.15 billion), Singapore (US). $15.91 billion) and the United Kingdom ($13.99 billion). Vietnam entered the top 10 for the first time with US$13.49 billion on a direct risk basis.
Taiwanese banks’ exposure to the top 10 debtors reached $372.27 billion at the end of June, accounting for 73.85 percent of the country’s total outstanding international claims.