​​No. 26/191/DKom 

Indonesia's International Investment Position (IIP) in the second quarter of 2024 recorded a lower net liability. At the end of the second quarter of 2024, Indonesia's IIP amassed a net liability totalling USD247.3 billion, down from USD253.9 billion at the end of the first quarter of 2024. A higher Foreign Financial Assets (FFA) position, coupled with a lower Foreign Financial Liabilities (FFL) position contributed to the lower net liability IIP in the reporting period.

Indonesia's FFA position increased driven by rising investment activity by residents in various financial instruments abroad. The FFA position at the end of the second quarter of 2024 stood at USD491.5 billion, up 1.2% (qtq) from USD485.7 billion at the end of the first quarter of 2024. Nearly all FFA components recorded higher asset placements, primarily in the form of debt instruments. A further gain on the FFA position was also influenced by other change factors relating to the higher prices of several financial assets abroad.

The FFL position declined amid persistently solid foreign capital inflows to direct investment and portfolio investment. The FFL position at the end of the second quarter of 2024 fell 0.1% (qtq) to USD738.7 billion from USD739.6 billion at the end of the first quarter of 2024. Direct investment and portfolio investment maintained respective surpluses, thus reflecting sustained investor optimism in the promising domestic economic outlook, low inflation and attractive yields on domestic financial instruments. The FFL position was also influenced by a decline in the value of domestic financial instruments in line with broad-based US dollar appreciation against major global currencies, including the Rupiah, as well as lower domestic equity prices.

Bank Indonesia views the recent developments in Indonesia's IIP in the second quarter of 2024 as solid, thereby supporting external resilience. This was reflected in the lower ratio of Indonesia's IIP to GDP, from 18.4% in the first quarter of 2024 to 18.1% in the second quarter of 2024. Furthermore, long-term maturity instruments (92.8%) continued to dominate Indonesia's liability IIP structure, primarily through direct investment. Moving forward, Bank Indonesia will remain vigilant of global economic dynamics that could impact the IIP outlook, while strengthening the policy mix response supported by close synergy with the Government and relevant authorities to bolster external sector resilience.  Moreover, Bank Indonesia will also remain observant of the potential risks posed by a net liability IIP on the economy.

Further information is presented in Indonesia's IIP Report Q2/2024 on the Bank Indonesia website.

Jakarta 4th September 2024

Communication Department

Erwin Haryono

Assistant Governor​