NOT UNIQUE: Absence of capital outflows would cause foreign-exchange reserves to swell and place appreciation pressure on the New Taiwan dollar, the central bank governor said
Taipei Times
Date: Aug 30, 2018
By: Crystal Hsu / Staff reporter
The nation’s persistent financial account deficit reflects a continuous search by Taiwanese
Central bank Governor Yang Chin-long explains the concept of international balance of payments at a news conference in Taipei yesterday. Photo: Wu Chia-jung, Taipei Times
life insurance companies for recurring income to match their debt obligations, a move that is common in nations with current account surpluses, central bank Governor Yang Chin-long (楊金龍) told reporters in Taipei yesterday.
Yang called the unscheduled news conference after Taiwan in the second quarter recorded a net outflow in its financial account for the 32nd consecutive quarter, with a total outflow of US$380.42 billion.
“The phenomenon is neither unique nor problematic, as seen in 20 of 37 advanced economies [that had current account surpluses] last year,” Yang said.
Domestic life insurers have to seek fixed-income assets overseas due to a lack of investment tools in Taiwan, he said, adding that the financial health of the central and local governments have rendered bond issuances unnecessary. [FULL STORY]