No. 24/353/DKom
Indonesia's International Investment Position (IIP) recorded a lower net liability in the third quarter of 2022. At the end of the third quarter of 2022, Indonesia's IIP amassed a net liability totalling USD262.0 billion (20.0% of GDP), lower than USD270.5 billion (21.3% of GDP) net liability recorded in the previous quarter, stemmed from a decrease in the position of Foreign Financial Liabilities (FFL) amid a relatively stable Foreign Financial Assets (FFA) position.
Indonesia's FFL position decreased in line with the lower value of domestic financial instruments amid a continued direct investment inflows surplus. The Indonesia's FFL position retreated 1.2% (qtq) from USD705.2 billion at the end of the second quarter of 2022 to USD696.8 billion at the end of the third quarter of 2022. The lower FFL position was primarily attributable to US dollar appreciation against major global currencies, including Rupiah. Thus, affecting the decline in domestic financial instruments value. Further declines were offset, however, by positive FFL transaction contributed by net inflows of direct investment in the reporting period in response to investor optimism in the national economic recovery outlook and conducive domestic investment climate.
Indonesia's FFA position relatively stable. At the end of the third quarter of 2022, the FFA position recorded a USD434.7 billion, relatively stable compared to the second quarter of 2022. The FFA position was supported by higer position of portfolio investment and other investment assets along with private asset placements abroad. Notwithstanding, futher FFA gains were offset by broad-based US dollar appreciation against most global currencies and falling prices of several offshore assets.
Bank Indonesia views Indonesia's IIP in the third quarter of 2022 remained solid, thus supporting external resilience. This was reflected by a maintained ratio of Indonesia's net liability IIP to GDP, decreasing from 21,3% to 20,0% in the reporting period. In addition, the structure of Indonesia's IIP liabilities also remains dominated by long-term maturity instruments (93.9%), primarily in the form of direct investment. Moving forward, Bank Indonesia is confident that Indonesia's IIP performance will be maintained in line with efforts to foster economic recovery from the Covid-19 pandemic, supported by synergy between Bank Indonesia's policy mix, the Government and other relevant authorities policies. Nevertheless, Bank Indonesia will remain vigilant of the potential risks associated with a net liability IIP on the economy.
Further information is presented in Indonesia's IIP Report Q3/2022 on the Bank Indonesia website.
Jakarta, 26th September 2022
Communication Department
Erwin Haryono
Executive Director
Information on Bank Indonesia
Tel. 021-131, email: bicara@bi.go.id
