BI: Indonesia's Net Investment Liabilities Fall Due to Stronger Dollar
Bank Indonesia (BI) recorded that Indonesia’s net International Investment Position (IIP) liabilities in the first quarter of 2026 stood at US$227.6 billion. This position fell by US$45.8 billion compared to the end of the fourth quarter of 2025, which was recorded at US$273.4 billion.
Executive Director of BI’s Communication Department, Ramdan Denny Prakoso, stated that the decline in net liabilities was influenced by a deeper fall in the Foreign Financial Liabilities (KFLN) position compared to the decline in the Foreign Financial Assets (AFLN) position. The AFLN position at the end of the first quarter of 2026 was recorded at US$556.7 billion, down 0.4 percent from US$559.1 billion at the end of the fourth quarter of 2025.
“Indonesia’s AFLN position declined, mainly influenced by a decrease in foreign exchange reserves in line with the need for foreign currency to pay government external debt and the rupiah exchange rate stabilisation policy as Bank Indonesia’s response to high global financial market uncertainty,” Denny said in a press release, quoted on Thursday, 11 June 2026. 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 countries where assets are placed.
Meanwhile, Indonesia’s KFLN position fell 5.8 percent from US$832.6 billion at the end of the 2025 fourth quarter to US$784.3 billion in the first quarter of 2026. According to Denny, this decline mainly stemmed from the weakening value of domestic financial instruments amid direct investment performance that continued to record a surplus.
Denny also said that the portfolio investment and other investment positions declined, in line with the repayment of maturing private sector debt securities and foreign loans. In addition, he said, 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.
“Bank Indonesia views that the development of Indonesia’s IIP in the first quarter of 2026 remains maintained, thus supporting external resilience,” Denny said. This condition is reflected in the IIP to Gross Domestic Product ratio in the first quarter of 2026 of 15.5 percent, lower than the 18.9 percent in the fourth quarter of 2025. In addition, the structure of Indonesia’s IIP liabilities is also dominated by long-term instruments at 92.5 percent, especially in the form of direct investment.