No. 23/79/DKom
Indonesia’s International Investment Position (IIP) recorded a higher net liability at the end of Q4/2020. Indonesia’s
IIP at the end of Q4/2020 recorded a net liability of USD281.2 billion
(26.5% of GDP), up from USD260.0 billion (24.3% of GDP) at the end of
Q3/2020. The increase stemmed from a larger increment in the position of
Foreign Financial Liabilities (FFL) than Foreign Financial Assets
(FFA), in line with the strengthening of foreign capital inflows.
The higher Indonesia FFL position was supported by foreign
capital inflows in portfolio investment and direct investment to the
domestic financial market as global financial market uncertainty eased
during the reporting period. Indonesia’s FFL position at the
end of the fourth quarter of 2020 climbed 5.2% (qtq) from USD651.6
billion to USD685.5 billion. The rising FFL was primarily attributable
to an increase in foreign holdings of government debt securities and
direct investment inflows in the form of equity. Other change factors
included the positive revaluation of Rupiah-denominated domestic
financial assets, which edged up the FFL position, in line with the
Jakarta Composite Index (JCI) improvement as well as the Rupiah
appreciation against the US dollar.
Indonesia’s FFA position also increased primarily due to rising transactions of other investment and direct investment. At
the end of the fourth quarter of 2020, the FFA position grew 3.3%
(qtq), from USD391.6 billion to USD404.3 billion. Besides transaction
factors, the increasing FFA was also backed by the positive revaluation
given the rising average stock indexes in asset placement countries,
together with a broad-based US dollar depreciation against major global
currencies.
For 2020 as a whole, Indonesia's IIP recorded a lower net liability compared to the position at the end of the previous year.
Indonesia's IIP recorded a net liability of USD281.2 billion in 2020
(26.5 of GDP), declining from USD337.9 billion in 2019 (30.2% of GDP).
The decrease was driven by the FFA position expanded by USD29.0 billion
(7.7% yoy), mainly of other investment assets, meanwhile the FFL
position decreased by USD27.8 billion (3.9% yoy), due to the decline of
portfolio investment liability position.
Bank Indonesia views that Indonesia's IIP at the end of Q4/2020 and the overall 2020 remained solid. This
condition is indicated by the lower of Indonesia’s IIP ratio to GDP for
the overall 2020 compared to 2019. In addition, Indonesia's IIP
liability structure is also dominated by long-term maturity instruments.
Nevertheless, Bank Indonesia will observe potential the risk of IIP net
liabilities to the economy. Going forward, Bank Indonesia believes that
Indonesia’s IIP performance will be maintained in line with the effort
to stimulate economic recovery from the Covid-19 pandemic, supported by
the synergy of Bank Indonesia’s policy mix and government policies, as
well as policies of other relevant authorities.
Further information is presented in Q4/2020 Indonesia's IIP Report on the Bank Indonesia website.
Jakarta, 26th March 2021
Head of Communication Department
Erwin Haryono
Executive Director
Information about Bank Indonesia
Tel. 021-131, Email: bicara@bi.go.id
