According to the latest Bank Mandiri Market Review, Indonesia's International Investment Position (IIP) reached USD 274.0 billion in Q3 2024, marking a 9.7% increase compared to the previous quarter, which stood at USD 249.8 billion. This growth reflects the country’s robust economic performance amidst global financial uncertainty.

The increase in IIP was mainly driven by a rise in Indonesia’s Foreign Financial Liabilities (KFLN), which climbed by 6.8% quarter-on-quarter to USD 792.2 billion by the end of Q3 2024. This uptick in liabilities corresponds with a surge in foreign capital inflows, particularly foreign direct investments (FDI) and portfolio investments. As global market volatility decreased, Indonesia's domestic financial assets became more attractive to international investors.

At the same time, Indonesia’s Foreign Financial Assets (AFLN) grew significantly. By the end of Q3 2024, AFLN stood at USD 518.2 billion, a 5.3% increase from the previous quarter. The rise in AFLN was primarily driven by higher foreign exchange reserves, followed by increases in other investments, portfolio investments, and financial derivatives. Additionally, the weakening of the US dollar against major global currencies also contributed to strengthening Indonesia's foreign assets.

Bank Mandiri's research team notes that Indonesia remains an appealing investment destination. A major part of the country's international investment position is made up of long-term instruments, particularly direct foreign investments. In Q3 2024, FDI totaled IDR 232.7 trillion, up from IDR 196.2 trillion in the same period the year before. This aligns with the government's efforts to improve the domestic supply chain and boost export value through industrial downstreaming.

Despite global economic uncertainties, Indonesia's external position remains resilient. Bank Mandiri forecasts that Indonesia’s foreign exchange reserves will stay strong, expected to reach between USD 140 billion and USD 150 billion by the end of 2024.

With rising liabilities and assets, Indonesia continues to attract foreign investments. This strengthens the country's financial stability and supports its long-term growth prospects, positioning it as a key player in the global economy.