Indonesia's IIP Position Declines in Q1 2026, Reflecting External Resilience: BI

RRI.CO.ID, Jakarta - Indonesia’s external sector resilience strengthened in early 2026, reflected in the improvement of the International Investment Position (IIP). Bank Indonesia (BI) reported that net external liabilities decreased compared to the end of last year.

BI data shows that Indonesia’s IIP in the first quarter of 2026 (Q1‑2026) recorded net liabilities of USD 227.6 billion, down from USD 273.4 billion at the end of Q4‑2025.

BI Communication Department Executive Director Ramdan Denny Prakoso explained that the decline was influenced by Foreign Financial Liabilities (FFL), which fell more sharply than Foreign Financial Assets (FFA).

“Indonesia’s FFL position declined, primarily due to lower foreign exchange reserves, aligned with the need for foreign currency to service government external debt, as well as BI’s exchange rate stabilization policy in response to high global financial market uncertainty,” Denny said in a press release in Jakarta on June 10, 2026, quoting BI’s official website.

At the end of Q1‑2026, the FFA position stood at USD 556.7 billion, down 0.4 percent quarter‑to‑quarter. The decline was also influenced by weaker asset prices and the US dollar’s appreciation against several currencies of the countries where assets were placed.

Meanwhile, the FFL position reached USD 784.3 billion, down 5.8 percent from the previous quarter, despite stable foreign capital inflows for direct and portfolio investment.

The decline was driven by depreciation of domestic financial instruments, repayments of private-sector bonds, and the maturity of foreign debt. Direct investment continued to record a surplus, reflecting investor confidence in Indonesia’s economic outlook.

According to BI, Indonesia’s IIP in Q1‑2026 remained at a healthy level, supporting external resilience. The IIP‑to‑GDP ratio fell to 15.5 percent from 18.9 percent in Q4‑2025, with long‑term instruments—mainly direct investment—dominating liabilities.

Looking ahead, BI will continue to monitor global economic developments that could affect Indonesia’s IIP. The central bank is also strengthening policy coordination with the government and relevant agencies to maintain external sector stability and to anticipate risks associated with net liabilities. ***