Indonesia`s Net International Investment Liability Position Decreases: BI

Jakarta (ANTARA News) – Indonesia`s International Investment Position (IIP) recorded a decrease in net liability primarily due to diminished Foreign Financial Liabilities (FFL) position.

At the end of the first quarter of 2018, Indonesia`s IIP recorded a net liability of US$327.9 billion, or 31.8 percent of the gross domestic product (GDP), lower than the net liability of $333.6 billion (32.9 percent of the GDP) at the end of the fourth quarter of 2017, Antara News reported, citing a statement from Bank Indonesia (BI) received here on Saturday.

Indonesia`s lower FFL position was driven by a decline in portfolio investment and direct investment liabilities.

Indonesia`s FFL position decreased 0.6 percent quarter-to-quarter (qtq), or $4.0 billion, to $667.2 billion at the end of the first quarter of 2018, mainly due to a decrease in the rupiah-denominated investment instrument value, in line with a decline in the Jakarta Composite Index in the reporting period.

In addition, the decrease in FFL position was influenced by the strengthening of the US dollar against the rupiah.

The decrease in net liability of Indonesia`s IIP was also influenced by increase in its Foreign Financial Assets (FFA) position.

Indonesia`s FFA position at the end of the first quarter of 2018 rose 0.5 percent qtq, or $1.7 billion, to $339.3 billion, driven by FFA transactions in the form of direct investment, portfolio investment, and other investment.

In addition, the increase in FFA`s position at the end of the reporting period was affected by other changing factors, such as positive revaluation in non-US dollar-denominated FFA in line with the US dollar weakening against certain currencies.

BI views that the development of Indonesia`s IIP in the first quarter of 2018 remained healthy.

Nevertheless, BI continues to be aware of the risk of Indonesia`s net IIP liability position on the economy.

Going forward, BI believes Indonesia`s IIP performance will improve further in line with its maintained economic stability and economic recovery, supported by consistency and synergy in the policy mix of monetary, fiscal, and structural reforms. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)