BI: Indonesia's Net International Investment Position Liabilities Fall to USD 227.6 Billion in Q1

Bank Indonesia (BI) reported that Indonesia’s international investment position (IIP) recorded a decline in net liabilities to USD 227.6 billion in the first quarter of 2026, from a position of USD 273.4 billion at the end of the fourth quarter of 2025. The decline in net liabilities was influenced by a deeper drop in the position of foreign financial liabilities (KFLN) compared to the decline in foreign financial assets (AFLN), said Executive Director of BI’s Communication Department Ramdan Denny Prakoso in a statement in Jakarta on Wednesday. Furthermore, Indonesia’s AFLN position declined, mainly influenced by a reduction in foreign exchange reserves in line with the need for foreign currency to pay government foreign debt and the rupiah exchange rate stabilisation policy as BI’s response to high global financial market uncertainty. The AFLN position at the end of the first quarter of 2026 was recorded at USD 556.7 billion, down 0.4 per cent quarter-to-quarter from USD 559.1 billion at the end of the fourth quarter of 2025. The decline in the AFLN position was also influenced by the weakening of asset prices and the strengthening of the US dollar exchange rate against several currencies of asset placement countries, amid an increase in the position of direct investment assets, portfolio investment, and other investments. On the other hand, Indonesia’s KFLN position declined amidst sustained foreign capital inflows into direct investment and portfolio investment. Indonesia’s KFLN position at the end of the first quarter of 2026 was recorded at USD 784.3 billion, down 5.8 per cent quarter-to-quarter from USD 832.6 billion at the end of the fourth quarter of 2025. The decline mainly stemmed from the weakening value of domestic financial instruments, while direct investment performance continued to record a surplus, reflecting maintained investor confidence in the domestic economic outlook. The portfolio investment and other investment positions declined in line with the repayment of private sector debt securities and maturing foreign loans. In addition, the KFLN position was also influenced by the weakening of share prices and the strengthening of the US dollar exchange rate against the majority of global currencies, including the rupiah. BI views the development of Indonesia’s IIP in the first quarter of 2026 as maintained, thereby supporting external resilience. This is reflected in the ratio of Indonesia’s IIP to GDP in the first quarter of 2026 of 15.5 per cent, lower than the 18.9 per cent in the fourth quarter of 2025. Additionally, the structure of Indonesia’s IIP liabilities is still dominated by long-term instruments (92.5 per cent), primarily in the form of direct investment. BI stated that going forward, it will continue to monitor global economic dynamics that could affect the outlook for Indonesia’s IIP and continue to strengthen a policy mix response supported by close policy synergy with the government and relevant authorities to strengthen external sector resilience. In addition, BI will continue to monitor potential risks related to the IIP net liabilities to the economy.