BI Reveals Neto's Obligation To International Investment Down In The First Quarter Of 2025

JAKARTA - Bank Indonesia (BI) revealed that Indonesia's International Investment (PII) position in the first quarter of 2025 recorded a net obligation of 224.5 billion US dollars, down when compared to net obligations at the end of the fourth quarter of 2024 of 245.7 billion US dollars.

Executive Director of the BI Communication Department Ramdan Denny Prakoso explained that the decrease in net obligations stemmed from the increase in the position of Foreign Financial Assets (AFLN) and the decline in the position of Foreign Financial Obligation (KFLN).

Denny conveyed that Indonesia's AFLN's increasing position was driven by an increase in population investment in various foreign financial instruments.

"AFLN's position at the end of the first quarter of 2025 was recorded at 533.1 billion US dollars, up 1.9 percent (qtq) from 523.1 billion US dollars at the end of the fourth quarter of 2024," he explained in his statement, Wednesday, June 11.

According to him, almost all components of AFLN recorded an increase in placement transactions abroad, with the largest increase in other investment assets, especially in the form of loans and business receivables.

Denny explained that the increase in AFLN's further position was also supported by a weakening of the US dollar exchange rate against the majority of global currencies and an increase in international gold prices.

He said that the position of KFLN Indonesia had decreased amid the flow of foreign capital in direct investment and solid portfolio investment.

Meanwhile, KFLN Indonesia's position at the end of the first quarter of 2025 was recorded at USD 757.6 billion, down 1.5 percent (qtq) from USD 768.8 billion at the end of the fourth quarter of 2024.

Meanwhile, Denny said that direct investment still posted a surplus as a reflection of investor optimism about domestic economic prospects.

"The portfolio investment also noted net foreign capital inflows amid increasing global financial market uncertainty," he explained.

Denny explained that the development of KFLN's position was further influenced by the decline in the value of domestic financial instruments in line with the decline in the Composite Stock Price Index (IHSG).

Meanwhile, Bank Indonesia views that Indonesia's PII development in the first quarter of 2025 will be maintained so that it supports external resilience, this is reflected in Indonesia's PII ratio to GDP in the first quarter of 2025 of 16.0 percent, lower than 17.6 percent in the fourth quarter of 2024.

In addition, he conveyed that the structure of Indonesia's PII obligations was also dominated by long-term instruments (91.9 percent), especially in the form of direct investment.

In the future, Denny said that Bank Indonesia will always pay close attention to the dynamics of the global economy that can affect Indonesia's PII prospects and continue to strengthen the policy mix response, which is supported by close policy synergies with the Government and relevant authorities to strengthen the resilience of the external sector.

"Bank Indonesia will continue to monitor potential risks related to PII's net obligations to the economy," he said.