Indonesia’s International Investment Position (IIP) recorded a decreased net liability due to diminished Foreign Financial Liabilities (FFL) position. At the end of the second quarter (Q2) of 2018, Indonesia’s IIP recorded a net liability of US$305.6 billion (29.3% of GDP), lower than the net liability of US$325.6 billion (31.5% of GDP) at the end of the first quarter (Q1) of 2018.
Foreign Financial Liabilities (FFL) position was influenced by the decline in the value of domestic financial instruments. Indonesia’s FFL position down 3.9% (qtq) or US$26.1 billion to US$639.7 billion at the end of the second quarter of 2018, primarily on account of lower direct investment and portfolio investment components. The decreased FFL position was influenced by reduced value of rupiah-denominated investment instrument in line with falling Jakarta Composite Index (JCI) and the US dollar strengthening against rupiah.
Foreign Financial Assets (FFA) position also declined mainly due to the disposal of FFA in the form of other investments and reserve assets. Indonesia’s FFA position at the end of the second quarter of 2018 fell 1.8% (qtq) or US$6.1 billion to US$334.1 billion. The decline in Indonesia’s FFA position at the end of the reporting period was also influenced by other changes factor such as negative revaluation in the non-US dollar-denominated FFA in line with the US dollar strengthening against several major global currencies.