Taipei, Aug. 22 (CNA) Taiwan has recorded a net outflow of funds for the 28th consecutive quarter as of the second quarter of this year, the longest run in the country's history, according to the central bank.
In a statement released Monday, the central bank said that Taiwan had a net outflow in its financial account of US$14.58 billion during the April-June period, bringing the aggregate net outflow for the past 28 quarters to US$317.55 billion.
The aggregate net outflow on Taiwan's financial account, which measures the flow of direct investment and portfolio investments, is equivalent to the cost of building 168 Taipei 101 buildings or 21 high speed rail systems.
The central bank said that net portfolio investments held overseas by Taiwan residents in the second quarter rose by US$8.98 billion from a year earlier, with local insurance firms raising their holdings in securities and bonds in foreign markets.
During the second quarter, net portfolio investments held overseas by overseas nationals residing in Taiwan increased US$4.26 billion from a year earlier, the central bank said.
The continued outflow on Taiwan's financial account fueled mounting concerns that investors will continue to move funds out of the country and into U.S. dollar denominated assets.
In an effort to assuage such concerns, the central bank said that Taiwan is one of the few countries in the world to record a long term current account surplus and such countries tend to register net outflows on their financial accounts.
Other countries with a long term current account surplus and net outflows on their financial account include China, Japan, Singapore, South Korea, Germany, Malaysia and Russia.
The current account mainly measures a country's merchandise and service exports.
In the second quarter, Taiwan's current account recorded a surplus of US$17.65 billion with a surplus in merchandise trading of US$18.28 billion due to solid global demand at a time when the world economy is on track to recovery. In addition, the surplus also resulted from an increase in raw material prices, the bank added.
However, Taiwan recorded a deficit of US$2.91 billion in service trading in the second quarter, reflecting a decline in foreign arrivals to Taiwan and foreign tourist spending in the country, the central bank said.
The deficit in service trading also reflected an increase in the number of Taiwanese traveling overseas and a rise in their spending overseas, the central bank added.
In the first half of this year, Taiwan recorded US$28.59 billion in net outflows on its financial account, while the country's current account surplus is US$34.98 billion, according to the central bank.