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U.S. International Investment Position, 2nd Quarter 2020

Summary:
The U.S. net international investment position, the difference between U.S. residents’ foreign financial assets and liabilities, was –.05 trillion at the end of the second quarter of 2020, according to statistics released by the U.S. Bureau of Economic Analysis (BEA). Assets totaled .87 trillion and liabilities were .92 trillion. At the end of the first quarter, the net investment position was –.16 trillion (Table 1). The –2.6 billion change in the net investment position from the first quarter to the second quarter came from net financial transactions of –.5 billion and net other changes in position, such as price and exchange rate changes, of –5.1 billion (Table A). Coronavirus (COVID-19) Impact on Second Quarter 2020 International Investment Position In

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The U.S. net international investment position, the difference between U.S. residents’ foreign financial assets and liabilities, was –$13.05 trillion at the end of the second quarter of 2020, according to statistics released by the U.S. Bureau of Economic Analysis (BEA). Assets totaled $28.87 trillion and liabilities were $41.92 trillion.

At the end of the first quarter, the net investment position was –$12.16 trillion (Table 1).

U.S. International Investment Position, 2nd Quarter 2020
U.S. International Investment Position, 2nd Quarter 2020

The –$882.6 billion change in the net investment position from the first quarter to the second quarter came from net financial transactions of –$77.5 billion and net other changes in position, such as price and exchange rate changes, of –$805.1 billion (Table A).

Coronavirus (COVID-19) Impact on Second Quarter 2020 International Investment Position

In the second quarter of 2020, U.S. assets and liabilities increased following the first quarter decreases that reflected the impact of the COVID-19 pandemic. A recovery in global stock prices, responding to monetary accommodation and fiscal stimulus measures in the United States and abroad, drove the increases in portfolio investment and direct investment assets and liabilities. Both U.S. deposit assets and liabilities decreased, as some currency swap transactions between the U.S. Federal Reserve System and several foreign central banks in Europe and Japan were allowed to expire amid improved liquidity conditions in the global dollar funding markets. These currency swaps were initiated in the first quarter to alleviate the dollar shortage overseas. The full economic effects of the COVID-19 pandemic cannot be quantified in the IIP statistics because the impacts are generally embedded in source data and cannot be separately identified. For more information on the currency swaps, see the technical note that accompanied the September 18 international transactions accounts news release.

Table A. Quarterly Change in the U.S. Net International Investment Position
Billions of dollars, not seasonally adjusted

  Position,
2020 Q1
Change in position in 2020 Q2 Position,
2020 Q2
Total Attributable to:
Financial
transactions
Other changes
in position 1
U.S. net international investment position -12,163.3 -882.6 -77.5 -805.1 -13,045.9
   Net position excluding financial derivatives -12,197.0 -871.1 -137.8 -733.3 -13,068.1
   Financial derivatives other than reserves, net 33.7 -11.5 60.3 -71.7 22.2
   U.S. assets 26,921.3 1,951.5 (2) (2) 28,872.8
      Assets excluding financial derivatives 23,925.2 2,196.8 -141.1 2,337.9 26,122.0
      Financial derivatives other than reserves 2,996.1 -245.3 (2) (2) 2,750.8
   U.S. liabilities 39,084.5 2,834.1 (2) (2) 41,918.6
      Liabilities excluding financial derivatives 36,122.1 3,067.9 -3.3 3,071.3 39,190.1
      Financial derivatives other than reserves 2,962.4 -233.8 (2) (2) 2,728.6
1. Disaggregation of other changes in position into price changes, exchange rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
2. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. assets increased by $1.95 trillion, to a total of $28.87 trillion, at the end of the second quarter, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by decreases in financial derivatives and other investment assets. Portfolio investment assets increased by $1.39 trillion, to $12.39 trillion, and direct investment assets increased by $938.8 billion, to $7.94 trillion, driven mainly by increases in foreign stock prices that raised the value of these assets. Global stock prices recovered from the decreases that occurred in the first quarter at the onset of the COVID-19 pandemic.

U.S. liabilities increased by $2.83 trillion, to a total of $41.92 trillion, at the end of the second quarter, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by decreases in other investment liabilities and financial derivatives. Portfolio investment liabilities increased by $2.10 trillion, to $22.03 trillion, and direct investment liabilities increased by $1.34 trillion, to $10.10 trillion, driven mainly by increases in U.S. stock prices that raised the value of these liabilities.

U.S. International Investment Position, 2nd Quarter 2020
U.S. International Investment Position, 2nd Quarter 2020

Updates to First Quarter 2020 International Investment Position Aggregates

Trillions of dollars, not seasonally adjusted
  Preliminary estimate Revised estimate
U.S. net international investment position -12.06 −12.16
    U.S. assets 26.77 26.92
    U.S. liabilities 38.82 39.08

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Next release: December 29, 2020 at 8:30 A.M. EST
U.S. International Investment Position, Third Quarter 2020

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Bureau of Economic Analysis
The BEA Advisory Committee advises the Director of BEA on matters related to the development and improvement of BEA’s national, regional, industry, and international economic accounts, especially in areas of new and rapidly growing economic activities arising from innovative and advancing technologies, and provides recommendations from the perspectives of the economics profession, business, and government.

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