Jakarta - Bank Indonesia announced that Indonesia's International Investment Position (IIP) recorded an increase in net liabilities in the third quarter of 2021.

At the end of the third quarter of 2021, Indonesia's PII recorded a net liability of US$275.9 billion or 24.1% of GDP, growing compared to the net liability at the end of the second quarter of 2021 of US$264.7 billion or 23.9% of GDP.

"The increase in net liabilities came from an increase in the position of Foreign Financial Liability (FFL) which exceeded the increase in the position of Foreign Financial Assets (FFA)," said BI Executive Director Erwin Haryono in a publication on Wednesday (22/12).

The improvement in Indonesia's FFL position was supported by improved corporate performance in line with strong export performance and continued inflows of foreign capital into domestic financial markets. Indonesia's FFL position increased 4.1% (QoQ) from US$680.2 billion at the end of the second quarter of 2021 to US$707.8 billion at the end of the third quarter of 2021.

"The increase in liabilities was caused by a positive revaluation factor in the value of domestic financial instruments which was influenced by the increase in stock prices of several domestic companies, in line with strong exports and the strengthening of the Rupiah exchange rate against the US dollar," he added.

Further increases came from inflows of direct investment, portfolio investment, and other investments in line with investors' positive perception of the prospect of a sustained improvement in the domestic economy.

Indonesia's FFA position increased, contributed by the increase in all components of FFA. At the end of the third quarter of 2021, the FFA position grew by 4.0% (QoQ) to US$431.9 billion from US$415.4 billion the previous quarter.

According to him, all components experienced increased FFA with the most significant growth in foreign exchange reserve assets and other investments in line with additional SDR allocations, increased deposit placements, and private sector receivables. However, further increases were restrained by the revaluation factor due to the strengthening of the US dollar against the majority of major world currencies and the increase in yields on Government bonds in several asset placement countries.

"Bank Indonesia views that the development of Indonesia's PII in the third quarter of 2021 is maintained and supports external resilience. This was reflected in the structure of Indonesia's PII obligations which were dominated by long-term instruments (93.6%).