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U.S. International Investment Position, 3rd Quarter 2021

Summary:
The U.S. net international investment position (IIP), the difference between U.S. residents' foreign financial assets and liabilities, was –.07 trillion at the end of the third quarter of 2021, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). Assets totaled .45 trillion, and liabilities were .53 trillion. At the end of the second quarter, the net investment position was –.91 trillion. The net investment positions and components of assets and liabilities are presented in table 1. The –5.1 billion change in the net investment position from the second quarter to the third quarter came from net financial transactions of –4.0 billion and net other changes in position, such as price and exchange-rate changes, of –.1 billion that

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The U.S. net international investment position (IIP), the difference between U.S. residents' foreign financial assets and liabilities, was –$16.07 trillion at the end of the third quarter of 2021, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). Assets totaled $34.45 trillion, and liabilities were $50.53 trillion. At the end of the second quarter, the net investment position was –$15.91 trillion. The net investment positions and components of assets and liabilities are presented in table 1.

U.S. International Investment Position, 3rd Quarter 2021
U.S. International Investment Position, 3rd Quarter 2021

The –$165.1 billion change in the net investment position from the second quarter to the third quarter came from net financial transactions of –$114.0 billion and net other changes in position, such as price and exchange-rate changes, of –$51.1 billion that mostly reflected the depreciation of major foreign currencies against the U.S. dollar that lowered the value of U.S. assets in dollar terms (table A).

COVID-19 Impact on Third-Quarter 2021 International Investment Position

In the third quarter of 2021, a new allocation of special drawing rights, approved by the International Monetary Fund to mitigate the impact of the COVID-19 pandemic on the finances of developing countries, contributed to the increases in U.S. assets and liabilities. 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.

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

  End of quarter
position,
2021 Q2
Change in position in 2021 Q3 End of quarter
position,
2021 Q3
Total Attributable to:
Financial
transactions
Other changes
in position 1
U.S. net international investment position -15,906.0 -165.1 -114.0 -51.1 -16,071.1
   Net position excluding financial derivatives -15,943.9 -160.7 -106.0 -54.7 -16,104.5
   Financial derivatives other than reserves, net 37.9 -4.4 -8.0 3.6 33.5
   U.S. assets 34,273.3 181.2 (2) (2) 34,454.6
      Assets excluding financial derivatives 32,167.2 240.9 511.2 -270.3 32,408.1
      Financial derivatives other than reserves 2,106.1 -59.7 (2) (2) 2,046.5
   U.S. liabilities 50,179.3 346.3 (2) (2) 50,525.6
      Liabilities excluding financial derivatives 48,111.1 401.6 617.2 -215.7 48,512.6
      Financial derivatives other than reserves 2,068.3 -55.3 (2) (2) 2,013.0
1. Disaggregation of other changes in position into price changes, exchange rate changes, and other changes in volume and valuation is presented for annual statistics released in March and revised in June each year.
2. Financial transactions and other changes in financial derivatives positions are available on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. assets increased by $181.2 billion to a total of $34.45 trillion at the end of the third quarter, reflecting increases in portfolio investment and reserve assets. Portfolio investment assets increased by $194.3 billion to $16.16 trillion, driven by net U.S. purchases of foreign securities. Reserve assets increased by $105.0 billion to $695.1 billion, reflecting the allocation of $112.8 billion in new special drawing rights (SDRs) in August 2021 to the United States as its share of the $650 billion SDR allocation approved by the International Monetary Fund (IMF). The SDR is an international reserve asset created by the IMF to supplement its member countries' official reserves and can be exchanged between members for currencies such as the U.S. dollar, the euro, or the yen. The allocation in the third quarter was the largest in the history of the IMF.

U.S. liabilities increased by $346.3 billion to a total of $50.53 trillion at the end of the third quarter, mostly reflecting increases in other investment liabilities. Other investment liabilities increased by $294.8 billion to $7.77 trillion, reflecting increases in deposit liabilities and in SDR allocation liabilities that represent the U.S. long-term obligation to other IMF member countries holding SDRs. In an SDR allocation, the increase in U.S. liabilities offsets the increase in U.S. assets, so the allocation has no impact on the net international investment position.

U.S. International Investment Position, 3rd Quarter 2021
U.S. International Investment Position, 3rd Quarter 2021

Updates to Second Quarter 2021 International Investment Position Aggregates

Trillions of dollars, not seasonally adjusted
  Preliminary estimate Revised estimate
U.S. net international investment position -15.42 -15.91
    U.S. assets 34.20 34.27
    U.S. liabilities 49.62 50.18

Releases of New Statistics

With this release of the U.S. IIP Accounts, BEA is introducing two new IIP tables—tables 2.2 and 4.1. IIP table 2.2 features annual statistics on direct investment positions in U.S. resident special purpose entities (SPEs), which are U.S. legal entities with little or no employment or physical presence. The increased prevalence of SPEs heightens the need for separate statistics on their activities for analysis and for improved interpretability of macroeconomic statistics. IIP table 4.1 features quarter-end position statistics on U.S. debt positions by currency, sector, and maturity for U.S. assets and liabilities. These statistics will be valuable for assessing U.S. exposure to foreign currency risks and for helping to identify potential future financial crises. The new tables fulfill commitments to the IMF Task Force on Special Purpose Entities and the G–20 Data Gaps Initiative to release these statistics by yearend 2021. For more information, see "New Statistics on U.S. Resident Special Purpose Entities in the International Investment Position Accounts" and "New Statistics on U.S. Debt Positions in the International Investment Position Accounts."

Accelerating Release of Annual IIP Statistics

BEA will accelerate the publication of the annual IIP table 1.3 usually released in June each year to March each year. Table 1.3 provides details for the annual change in the IIP, such as financial transactions, price changes, exchange-rate changes, and other changes in volume and valuation. For the upcoming IIP release on March 29, 2022, BEA will include table 1.3 for 2021, which will also be available in BEA's Interactive Data Application. The table will subsequently be updated as part of the annual update in June each year.

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Next release: March 29, 2022, at 8:30 A.M. EDT
U.S. International Investment Position, Fourth Quarter and Year 2021

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U.S. International Investment Position Release Dates in 2022
Fourth Quarter and Year 2021 March 29
First Quarter 2022 and Annual Update June 28
Second Quarter 2022 September 28
Third Quarter 2022 December 29
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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