The exposure of local banks to the US had dropped 3.08 percent as of the end of September from three months earlier as lenders cut deposits with US reserve banks, the first decline in six quarters, the central bank said yesterday.
The reduction outpaced a 2.55 percent drop in exposure to the other nine regions in the top 10 for Taiwan, with the amount for all 10 totaling US$395.47 billion as of the end of the third quarter, central bank data showed.
Local lenders are flexible about allocating US-dollar capital to leverage favorable interest rate environments and other factors, a central bank official said.
Photo: Clare Cheng, Taipei Times
Local banks had US$152.62 billion in US exposure as of Sept. 30, or 28 percent of the overall overseas risk, the data showed.
With the release of the third-quarter figures, the US has been the nation where local lenders have the most exposure for 33 consecutive quarters, the data showed.
China was next with exposure there falling 0.67 percent to US$46.17 billion from the second quarter, as Taiwanese refrained from investing in Chinese-based funds, the official said.
Risk in China was the lowest since the second quarter of 2020, they said.
Exposure to China is on a long-term decline, which is reflected in other data compiled by the Financial Supervisory Commission, as local lenders are cautious about the weak economy there, they said.
South Korea for the first time squeezed into the top 10 last quarter, outranking Singapore by a small margin, the official said.
Exposure in South Korea fell 1.03 percent to US$15.62 billion, with a 4.14 percent drop, or US$15.47 billion less, in Singapore the primary factor, they said.
Exposure to Hong Kong sank the most among the top 10, falling 8.24 percent to US$2.80 billion, the data showed.
A strong US dollar was also a factor behind reductions in local banks’ exposure to Japan and the UK of 2.14 percent and 3.19 percent respectively, the central bank said.
The yen and pound depreciated 3 percent and 3.87 percent respectively against the greenback in the third quarter, it said.
Australia was the only one of the top 10 to buck the downtrend, gaining 1.44 percent, the data showed.
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