Indonesia’s net international investment position liability declined in Q2 2021

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N ° 23/244 / DKom

Indonesia’s international investment position (IPI) recorded lower net liabilities at the end of the second quarter of 2021. At the end of the reporting period, Indonesia’s PEG recorded a net liability totaling USD 264.1 billion (23.8% of GDP), lower than the net liability of USD 267.5 billion (25.2% GDP) at the end of the first quarter of 2021. The decrease is due to a larger increase in foreign financial assets (FFA) than foreign financial liabilities (FFL).

Enlarged Indonesia’s FFA Position partially due to the increase in direct investment transactions and other investment assets. Tthe FFA stationat the end of the second quarter of 2021grew up 1.2% (qtq) in USD415.0billion USD410.2billionat the end of the first quarter of 2021. In addition to the transaction factors, the FFA gain was also brought about by a revaluation caused by the widespread depreciation of the US dollar against the major world currencies., in addition to increasingstock market indices of more activecountry of placement.

Indonesia’s higher position in FFL was supported by foreign capital in the form of direct investment and portfolio investment. The FFL position increased 0.2% (qtq), from $ 677.7 billion at the end of the first quarter 2021 to $ 679.1 billion at the end of the second quarter 2021. The increase in FFL is mainly attributable to an increase in foreign capital inflows in direct investments and portfolio investmentsin line with investors’ positive perception of the promising domestic economic outlook. A new inclination of the FFL position has been compensated by a negative revaluation of national financial instruments due to the fall in the stock prices of several national companies.

Bank Indonesia believes Indonesia’s PEG at the end of Q2 2021 remained strong and supported external resilience. This condition is indicated by Indonesia’s IIP liability structure dominated by long-term maturity instruments. Going forward, the Bank of Indonesia believes that Indonesia’s PII performance will be sustained in line with efforts to boost economic recovery from the Covid-19 pandemic, supported by the synergy of the policy mix of Bank of Indonesia and government policies, as well as policies of other relevant authorities. . Nonetheless, the Bank of Indonesia will observe the potential risk of net liabilities of the IIP to the economy.

Further information is presented in Indonesia’s IIP report for the second quarter of 2021 on the Bank of Indonesia website.

Jakarta, September 24, 2021

Head of Communication Department

Erwin Haryono

Executive director

Disclaimer

Bank Indonesia published this content on September 24, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on September 24, 2021 10:31:03 AM UTC.


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