U.S. top largest debtor country to Taiwan's banks for 38th straight quarter

Taipei, March 31 (CNA) The United States remained the largest debtor nation to Taiwanese banks for the 38th consecutive quarter at the end of 2024, according to the local central bank.

Data compiled by the central bank showed Taiwanese banks' exposure to the U.S. stood at US$176.997 billion at the end of 2024, down US$4.988 billion or 2.74 percent, from a quarter earlier.

Speaking with reporters, Hsieh Jen-chun (謝人俊), deputy head of the central bank's Department of Financial Inspection, said that amid economic uncertainties, many enterprises have become more cautious, slowing down their investments and borrowing.

In addition, Hsieh said Taiwanese investors in U.S. mutual funds rushed to redeem their investments, further reducing exposure to the U.S.

At the end of 2024, international claims by Taiwanese banks on a direct risk basis -- comprising loans, investments, deposits and other holdings -- fell by US$11.0 billion from the previous quarter to US$599.4 billion, ending a four-quarter streak of increases, according to the data.

Hsieh said the decline in aggregate exposure by the local banking sector was due to a drop in interbank loans and the weakness of non-U.S. dollar currencies against the greenback.

Hsieh added that since almost all major currencies depreciated against the U.S. dollar in the fourth quarter of last year, Taiwanese banks' exposure denominated in non-U.S. dollar currencies decreased when converted into American dollars.

According to Hsieh, the South Korean won, the Australian dollar, the Japanese yen, the Euro and the Chinese yuan moved lower by 10.85 percent, 10.22 percent, 8.87 percent and 6.81 percent and 3.88 percent, respectively, against the U.S. dollar.

At the end of 2024, China remained the second-largest debtor to the local banking system, with exposure at US$46.94 billion, a 2.75 percent decrease from the previous quarter.

After the U.S. and China, Luxembourg ranked third with exposure from Taiwanese banks at US$44.20 billion at the end of December, a 0.92 percent decrease from the previous quarter, followed by Australia (US$37.86 billion, down 5.79 percent) and Japan (US$34.50 billion, down 2.84 percent).

Rounding out the top 10 were Hong Kong with exposure of about US$31.82 billion at the end of December, down 1.15 percent from the previous quarter, followed by the United Kingdom (US$20.08 billion, down 2.34 percent), Singapore (US$17.80 billion, up 0.10 percent), South Korea (US$17.13 billion, down 0.76 percent), and France (US$15.83 billion, down 0.95 percent).

Exposure to the top 10 debtors totaled US$443.2 billion, accounting for 73.93 percent of the total international claims held by Taiwan's banks at the end of December, the central bank said.