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Taiwan's Balance of Payment Turns From Surplus to Deficit
Because of the huge outflow of the New Taiwan Dollar, the balance of payment of Taiwan in the third quarter plunged from surplus of eight consecutive quarters to deficit. Worse still, in the financial account there was a huge net capital outflow of US$4.069 billion, showing that local and foreign investors' lack of confidence in making investment in Taiwan.
According to the "central bank" of Taiwan, the Island, in its balance of payment in the third quarter, had a deficit of US$0.437 billion, setting a record low in the past five years. The Taiwan financial sources noted that the huge amount of net outflow of money attributed mainly to the locals' selling spree of New Taiwan Dollar and purchasing US dollar as well as the outflow of foreign capital. As the capital account reflects investors' anticipatory psychology, the net outflow of capital account is an expression of a confidence crisis emerged among foreign investors and Taiwan islanders.
By PD Online staff Deng Gang
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