TAIPEI: The United States has maintained its position as the largest debtor nation to banks in Taiwan for the 37th consecutive quarter, according to recent data from Taiwan's central bank. At the close of the third quarter of 2024, the exposure of Taiwanese banks to the U.S. reached US$181.99 billion, marking an increase of US$6.67 billion, or 3.80 percent, from the previous quarter.

According to Focus Taiwan, Hsieh Jen-chun, deputy head of the central bank's Department of Financial Inspection, highlighted that Taiwanese banks continued to invest in trusted U.S. assets and expanded interbank loans and financial bond purchases in response to a stable U.S. economy. The U.S. accounted for 29.81 percent of Taiwanese banks' global claims as of September, a slight decrease from 29.89 percent at the end of June.

China retained its position as the second-largest debtor to Taiwan's banking sector, with exposure amounting to US$48.27 billion by the end of September, a 4.34 percent increase from June. Hsieh attributed this rise to the appreciation of the Chinese yen against the U.S. dollar and an uptick in loans and bond purchases.

The disparity between Taiwanese banks' exposure to the U.S. and China widened to US$133.7 billion by September's end, up from US$129.0 billion in June, and US$111.0 billion from June 2023. The central bank noted that this widening gap reflects the impact of escalating trade tensions, geopolitical unease, and rising protectionism on China's economy.

Overall, international claims by Taiwanese banks reached US$610.4 billion at the end of the third quarter, a 4.08 percent increase from the previous quarter, driven by heightened lending to the nonbanking segments in debtor nations, according to the central bank.

Following the U.S. and China, Luxembourg ranked third with Taiwanese bank exposure at US$44.62 billion, a 9.68 percent rise due to increased investments in currency mutual funds. This was followed by Australia at US$40.19 billion, an increase of 7.39 percent, and Japan at US$35.51 billion, which saw a 17.04 percent decrease.

The central bank cited the Japanese yen's appreciation against the U.S. dollar and a rise in interbank loans as contributing factors to changes in exposure to Japan.

Other top debtor areas included Hong Kong with US$32.20 billion, the United Kingdom at US$20.56 billion, Singapore at US$17.78 billion, South Korea at US$17.26 billion, and France at US$15.98 billion.

These top ten debtor regions represented US$454.30 billion, or 74.43 percent, of the total international claims of Taiwan's banks as of September, the central bank reported.