The nation’s balance of payments last quarter recorded a current account surplus of US$18.16 billion, rising 6.1 percent from a year earlier, as exports held resilient, the travel deficit subsided and the primary income account posted gains, the central bank said.
Exports rose 3.7 percent year-on-year in the first quarter to US$78.7 billion, while imports grew 3.5 percent to US$69.17 billion, Ministry of Finance data showed.
Nevertheless, the trade in goods surplus lost steam, as the COVID-19 pandemic caused supply and demand shocks to the global economy and weighed on international raw material prices, the central bank said.
Lockdowns and travel bans around the world helped narrow the nation’s services deficit, the bank said.
The nation has long seen a travel deficit because Taiwanese love to vacation abroad, driving travel spending higher than travel income, the bank said.
Travel revenue last quarter stood at US$1.435 billion, the weakest since the final quarter of 2008, while travel expenditure amounted to US$2.253 billion, the lowest since the second quarter of 2010, central bank data showed.
International travel came to a standstill last quarter after the coronavirus outbreak swept across Europe and the US, prompting authorities to close their borders to contain the disease, the bank said.
Travel restrictions look unlikely to be lifted this quarter, as infections continue to climb in most countries, it said.
Additionally, the primary income account registered a surplus of US$7.21 billion, owing primarily to a decline in outward interest payments by domestic banks.
On the other hand, the nation’s financial account saw net capital outflows for the 39th consecutive quarter, raising the total capital drain to NT$14.44 trillion, equivalent to six years of tax revenue, the central bank said.
Foreign portfolio managers cut holdings of local shares by NT$534 billion, the most drastic adjustments in history, it said.
Likewise, local life insurers and fund houses lowered stakes in overseas investments whose value took a hard hit amid the pandemic and an oil price rout, it said.
Portfolio investment by domestic insurers in foreign securities assets registered a net increase of US$6.01 billion, the slowest pace in seven years, it said.
Aggressive interest rate cuts by global central banks to ward off a credit crunch also made foreign investment tools less attractive.
The central bank said it is common for countries with current account surpluses to see capital outflows as financial institutions seek better yields.
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