U.S. International Investment Position, Fourth Quarter and Year 2020

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The FINANCIAL — Fourth Quarter : The U.S. net international investment position, the difference between U.S. residents’ foreign financial assets and liabilities, was –$14.09 trillion at the end of the fourth quarter of 2020, according to statistics released by the U.S. Bureau of Economic Analysis (BEA). Assets totaled $32.16 trillion and liabilities were $46.25 trillion.

At the end of the third quarter, the net investment position was –$13.86 trillion

The –$227.5 billion change in the net investment position from the third quarter to the fourth quarter came from net financial transactions of –$287.1 billion and net other changes in position, such as price and exchange rate changes, of $59.6 billion

U.S. assets increased by $2.64 trillion, to a total of $32.16 trillion at the end of the fourth quarter, reflecting increases in all major categories of assets, particularly in portfolio investment and direct investment assets. Portfolio investment assets increased by $1.59 trillion, to $14.67 trillion, and direct investment assets increased by $955.5 billion, to $9.30 trillion, driven mainly by foreign stock price increases and, to a lesser extent, the appreciation of major foreign currencies against the U.S. dollar that raised the value of U.S. assets in dollar terms.

U.S. liabilities increased by $2.87 trillion, to a total of $46.25 trillion at the end of the fourth quarter, reflecting increases in all major categories of liabilities, particularly in portfolio investment and direct investment liabilities. Portfolio investment liabilities increased by $1.64 trillion, to $24.67 trillion, and direct investment liabilities increased by $1.12 trillion, to $11.97 trillion, driven mainly by U.S. stock price increases that raised the value of these liabilities.

The U.S. net international investment position was –$14.09 trillion at the end of 2020 compared to –$11.05 trillion at the end of 2019 (Table 1). 

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The –$3.04 trillion change in the net investment position from the end of 2019 to the end of 2020 came from net financial transactions of –$743.6 billion and net other changes in position, such as price and exchange rate changes, of –$2.30 trillion (Table B).

U.S. assets increased by $3.00 trillion, to a total of $32.16 trillion, at the end of 2020, reflecting increases in all major categories of assets, particularly in portfolio investment, financial derivatives, and direct investment assets. Portfolio investment assets increased $1.30 trillion, to $14.67 trillion, and direct investment assets increased $496.9 billion, to $9.30 trillion, driven mainly by the appreciation of major foreign currencies against the U.S. dollar that raised the value of U.S. assets in dollar terms, and to a lesser extent, by financial transactions. Financial derivatives increased $755.3 billion, to $2.55 trillion, mostly reflecting increases in single-currency interest rate contracts.

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

  Position,
2020 Q3
Change in position in 2020 Q4 Position,
2020 Q4
Total Attributable to:
Financial
transactions
Other changes
in position 1
U.S. net international investment position -13,864.6 -227.5 -287.1 59.6 -14,092.1
   Net position excluding financial derivatives -13,891.6 -193.9 -289.7 95.8 -14,085.5
   Financial derivatives other than reserves, net 26.9 -33.6 2.6 -36.2 -6.6
   U.S. assets 29,516.5 2,639.5 (2) (2) 32,156.0
      Assets excluding financial derivatives 26,971.3 2,638.9 121.4 2,517.5 29,610.3
      Financial derivatives other than reserves 2,545.2 0.6 (2) (2) 2,545.7
   U.S. liabilities 43,381.1 2,867.0 (2) (2) 46,248.1
      Liabilities excluding financial derivatives 40,862.9 2,832.9 411.2 2,421.7 43,695.8
      Financial derivatives other than reserves 2,518.2 34.1 (2) (2) 2,552.4

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 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.

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U.S. liabilities increased by $6.04 trillion, to a total of $46.25 trillion, at the end of 2020, reflecting increases in all major categories of liabilities, particularly in portfolio investment, direct investment, and financial derivatives liabilities. Portfolio investment liabilities increased by $3.28 trillion, to $24.67 trillion, and direct investment liabilities increased by $1.42 trillion, to $11.97 trillion, driven mainly by U.S. stock price increases and, to a lesser extent, financial transactions. Financial derivatives increased $782.1 billion, to $2.55 trillion, mostly reflecting increases in single-currency interest rate contracts.

U.S. Net International Investment Position
U.S. Assets and Liabilities: Quarterly, not seasonally adjusted

Table B. Annual Change in the U.S. Net International Investment Position
Billions of dollars

  Position,
2019
Change in position in 2020 Position,
2020
Total Attributable to:
Financial
transactions
Other changes
in position 1
U.S. net international investment position -11,050.5 -3,041.6 -743.6 -2,298.0 -14,092.1
   Net position excluding financial derivatives -11,070.7 -3,014.8 -740.3 -2,274.6 -14,085.5
   Financial derivatives other than reserves, net 20.2 -26.8 -3.3 -23.5 -6.6
   U.S. assets 29,152.8 3,003.2 (2) (2) 32,156.0
      Assets excluding financial derivatives 27,362.4 2,247.9 763.5 1,484.4 29,610.3
      Financial derivatives other than reserves 1,790.4 755.3 (2) (2) 2,545.7
   U.S. liabilities 40,203.3 6,044.8 (2) (2) 46,248.1
      Liabilities excluding financial derivatives 38,433.0 5,262.7 1,503.7 3,759.0 43,695.8
      Financial derivatives other than reserves 1,770.3 782.1 (2) (2) 2,552.4

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 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.

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