BI Reveals Indonesia's International Investment In The First Quarter Of 2024 Down

JAKARTA - Bank Indonesia (BI) noted that Indonesia's International Investment Position (PII) in the first quarter of 2024 was recorded to have decreased compared to the previous quarter.

BI Assistant Governor Erwin Haryono conveyed his net PII obligation in the first quarter of 2024 of US$253.0 billion or a decrease when compared to net obligations at the end of the fourth quarter of 2023 of US$261.2 billion.

"The decrease in net liabilities stems from a decrease in the position of foreign financial obligations (KFLN) and an increase in the position of foreign financial assets (AFLN)," he said in a statement, Wednesday, June 5.

Erwin said that the position of KFLN Indonesia decreased amid the solid flow of foreign capital in direct investment. Meanwhile, the position of KFLN Indonesia at the end of the first quarter of 2024 fell 0.8 percent quarter to quarter (qtq) to 738.7 billion US dollars, from 745.1 billion US dollars at the end of the fourth quarter of 2023.

According to Erwin, the development of KFLN is due to the maintained flow of foreign capital in direct investment as a reflection of investor optimism for domestic economic prospects.

Meanwhile, portfolio investment in the form of domestic debt securities recorded an outflow as global financial market uncertainty increased. The decline in KFLN's position was also influenced by other changing factors in line with the strengthening of the US dollar exchange rate against the majority of global currencies, including the Rupiah, thereby reducing the value of domestic financial instruments.

In addition, Erwin said that Indonesia's AFLN position increased, driven by increased population investment in various foreign financial instruments. AFLN's position at the end of the first quarter of 2024 was recorded at US$485.7 billion, up 0.4 percent (qtq) from US$483.9 billion at the end of the fourth quarter of 2023.

According to Erwin, almost all components of AFLN recorded an increase in overseas placement, with the largest increase in Other Investment Assets in the form of deposits and business receivables.

"The increase in AFLN's position is further restrained by other change factors in line with the strengthening of the US dollar exchange rate against the majority of global currencies," he concluded.