Indonesia’s International Investment Position (IIP) recorded a larger net liability. At the end of the second quarter (Q2) of 2020, Indonesia’s IIP registered a net liability totalling US$280.8 billion (25.7% of GDP), increasing from US$256.6 billion (22.8% of GDP) at the end of the previous quarter. The increase was stemmed from a larger increment of Foreign Financial Liabilities (FFL) than Foreign Financial Assets (FFA).
Indonesia’s higher FFL position was mainly triggered by an influx of foreign capital in portfolio investment and direct investment to the domestic financial market, in line with less uncertainty of global financial markets during the reporting period. Indonesia’s FFL position in the second quarter of 2020 climbed 6.3% (qtq) from US$620.7 billion to US$659.6 billion.
The rising FFL was primarily attributable by an increase in foreign ownership position in government and private sector debt securities as well as larger equity capital transactions from affiliates. A positive revaluation of rupiah-denominated investment instruments in line with the Jakarta Composite Index (JCI) rally and the Rupiah appreciation against the US dollar also contributed to Indonesia’s higher FFL position.
