Bank Indonesia (BI) reported that Indonesia's International Investment Position (IIP) in Q1 2023 showed a slight increase in net liabilities. The net liability stood at USD 255.3 billion, rising slightly from USD 252.7 billion in Q4 2022. The growth in net liabilities was primarily driven by the Foreign Financial Liability Position (FFLP), which exceeded the growth in the Foreign Financial Asset Position (FFAP). The FFAP saw an increase, mainly supported by higher foreign exchange reserves, reaching USD 464.5 billion at the end of Q1 2023, up 3.3% from the previous quarter. The majority of components within the FFAP showed positive growth, including foreign exchange reserves, direct investments, other investments, and portfolio investments.
According to Erwin Haryono, Head of BI's Communication Department (Dkom), the rise in FFAP was influenced by factors such as the placement of assets, the appreciation of asset prices, and the depreciation of the US dollar against global currencies. The Foreign Financial Liability Position (FFLP) also experienced growth in Q1 2023, reaching USD 719.8 billion, a 2.5% increase from Q4 2022. This was driven by increased inflows of foreign portfolio investments and continued solid foreign direct investments, reflecting business optimism regarding Indonesia's economic prospects. BI views the performance of Indonesia's IIP in Q1 2023 as supportive of external resilience, with the IIP-to-GDP ratio remaining at around 19.1%, slightly lower than the previous quarter.
