Indonesia's International Investment Position (IIP) recorded a rise in net liabilities during the third quarter (Q3) of 2024. By the end of Q3 2024, Indonesia’s net liabilities stood at $274.0 billion, a notable increase compared to $249.8 billion at the end of the previous quarter, Q2 2024. This increase in net liabilities is primarily attributed to the growth in Foreign Financial Liabilities (KFLN), which outpaced the rise in Foreign Financial Assets (AFLN).

Indonesia’s position in Foreign Financial Assets (AFLN) saw a boost during the quarter. AFLN increased by 5.3% quarter-on-quarter, rising from $492.2 billion in Q2 2024 to $518.2 billion at the close of Q3 2024. This increase was driven by higher investments by Indonesian residents in various foreign financial instruments. Key contributors to the AFLN increase included higher foreign reserves, direct investments, and other investments. Additionally, the appreciation of foreign currencies against the US dollar also contributed to the growth in AFLN.

On the flip side, Indonesia’s position in Foreign Financial Liabilities (KFLN) also rose significantly in Q3 2024, reflecting an influx of foreign capital, particularly in direct investment and portfolio investments. KFLN reached $792.2 billion at the end of Q3 2024, marking a 6.8% increase from the previous quarter, where it stood at $742.0 billion. This rise is largely attributed to robust direct investments and portfolio investments, which recorded a surplus, reflecting strong economic growth prospects for Indonesia, low inflation, and attractive yields. Additionally, the depreciation of the US dollar against major global currencies, including the Indonesian Rupiah, alongside the increase in Indonesian stock market prices, played a role in this growth.

Bank Indonesia views the developments in Indonesia’s International Investment Position in Q3 2024 as stable, supporting external resilience. This is reflected in the ratio of Indonesia's IIP to GDP, which remained steady at 19.9%. Furthermore, the structure of Indonesia's IIP continues to be dominated by long-term instruments, particularly direct investments, accounting for 92.3% of the total position.

Looking ahead, Bank Indonesia remains vigilant in monitoring global economic dynamics that may affect the future trajectory of Indonesia’s IIP. The central bank also plans to strengthen its policy mix in collaboration with the government and relevant authorities to enhance external resilience. In addition, Bank Indonesia will continue to track potential risks associated with net liabilities in the IIP and their potential impact on the national economy.