Michelle Natalia
"The FFA position decreased as a corollary of reserve assets transactions due to the need to service government external debt and in anticipation of demand for foreign currency liquidity in the banking industry," he added.
The FFA position in the second quarter of 2023 stood at USD462.7 billion, down 0.7% (qtq) from USD466.1 billion at the end of the previous period. This was primarily due to a decrease in the position of reserve assets caused by servicing government's external debt and in anticipation of demand for foreign currency liquidity in the banking industry in line with increasing economic activity. Meanwhile, the asset positions of direct investment, portfolio investment and other investment increased. The lower FFA position was also influenced by a dip in asset prices along with US Dollar appreciation against currencies in asset placement countries.
"Bank Indonesia views Indonesia's IIP in the second quarter of 2023 remained solid, thus supporting external resilience," he stated.
This was reflected by a lower ratio of Indonesia's net liability IIP to GDP from 19.0% in the previous period to 18.7% in the reporting period. In addition, the structure of Indonesia's IIP liabilities also remained dominated by long-term maturity instruments (94.2%), primarily in the form of direct investment.
"Moving forward, Bank Indonesia is confident that Indonesia's IIP performance will be maintained in line with post-Covid-19 pandemic economic recovery efforts, supported by the synergy between Bank Indonesia's policy mix, the Government, and other relevant authorities. Nevertheless, Bank Indonesia will remain vigilant of the potential risks posed by a net liability IIP on the economy," he concluded. (WHY)
