Brisk foreign demand for Dutch debt certificates

Statistical News Release
Date 19 September 2011

During the second quarter of 2011, foreign investors bought EUR 35 billion worth of Dutch debt certificates. This is shown by the balance of payments statistics published today by de Nederlandsche Bank (DNB). Only during the fourth quarter of 2008, when the Dutch Government had to finance the takeover of Fortis Nederland at the peak of the financial crisis, did DNB record larger foreign purchases (almost EUR 40 billion).

During the first half of 2011, foreign investor’s purchases of Dutch-issued debt certificates ran to EUR 58 billion (see Chart). Unlike in 2008, however, much of the debt paper sold abroad in the first half of 2011 was issued by Dutch banks. In all, during this period, Dutch banks issued EUR 59 billion in new debt certificates, the bulk of which ended up in foreign hands. Partly on account of this, total foreign holdings of Dutch paper grew to EUR 840 billion by mid-2011. Over half of this amount was issued by the Dutch banking sector. Thus some 85 per cent of Dutch bank-issued debt certificates now resides in foreign investment portfolios, compared to some 65 per cent of all Dutch-issued paper.

Foreign purchases and holdings of Dutch debt certificates

The Dutch current-account surplus came out at EUR 13 billion (or 8½ per cent of GDP) during the second quarter of 2011, double the amount recorded in the corresponding quarter of 2010 (see Chart). This increase mainly reflects higher surpluses in the goods and income accounts. The balance from the goods trade rose by almost EUR 3 billion to EUR 9 billion. Viewed by value, goods imports and exports were up 8 per cent and 11 per cent, respectively, from a year earlier. This reflects slower growth than during the first quarter, when increases of, respectively, 18 and 16 per cent were recorded compared to the year before. The income account surplus grew by almost EUR 4 billion in the first quarter, the main cause being relatively strong profit growth realised by foreign subsidiaries of Dutch companies.

Current-account balance (in per cent of GDP)

For further information please contact Herman Lutke Schipholt (+31 20 524 2712, + 31 6524 96 900) or Kees Verhagen (tel. +31 20 524 2272, +31 6211 23 922).