US remains Taiwan’s top debtor country for 28th straight quarter

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By Pan Tzu-yu and Frances Huang

TAIPEI, Taiwan, (CNA) – The United States remained the largest debtor to Taiwan’s banking sector for the 28th consecutive quarter as of the end of June, with its exposure rising about 6 percent from a quarter earlier, according to the local central bank.

Central bank data showed that outstanding claims by Taiwan’s banking sector to the US on a direct risk basis totaled US$132.63 billion as of the end of June, up by US$7.25 billion, or 5.78 percent, from a quarter earlier.

The interest rate hikes this year by the Federal Reserve has raised US treasuries and bond yields, spurring Taiwanese banks to increase their holdings of US debt, Taiwan’s central bank said Friday.

Meanwhile, China remained the second largest debtor to Taiwanese banks as of the end of June, with exposure of US$52.35 billion, which was a quarterly drop of US$4.42 billion, or 7.79 percent, the central bank said, attributing the decline to a stronger US dollar.

Hong Kong was in third spot, with exposure of US$35.91 billion as of the end of June, down 3.93 percent from a year earlier, followed by Luxembourg (US$33.67 billion), Japan (US$29.02 billion), and Australia (US$28.89 billion), the data showed.

Vietnam, which was in seventh place, showed a quarterly 8.10 percent debt increase to US$18.24 billion, as Taiwanese investors have been flocking to the Southeastern Asian country amid restructuring of the global supply chain, the central bank said.

In eighth place was Singapore, with exposure of US$18.18 billion as of the end of June, followed by the Cayman Islands (US$17.89 billion), and the United Kingdom (US$16.97 billion), according to the data.

As of the end of June, outstanding international claims by Taiwan’s banking sector on a direct risk basis totaled US$519.5 billion, down 1.74 percent from a quarter earlier due to a decline in debts to non-bank private entities, the central bank said.

The top ten debtors accounted for 73.87 percent of Taiwanese banks’ total outstanding international claims at the end of June, with their exposure reaching US$383.7 billion, the central bank said.

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