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The IMF International Investment Position

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The IIP reflects a country’s external exposure and is crucial for monetary policy analysis. It also contributes to the analysis of foreign exchange rate policies. In the past, this indicator received little attention, but this is changing. It is increasingly important for monetary policy analysis and is especially important for the euro area.

The IIP measures the value of a country’s external financial assets and liabilities and tells if the country is a net debtor or creditor. The data reflect changes in exchange rates and value of transactions with nonresidents, which influence the stock of foreign assets and liabilities. The international investment position is presented in million Polish Zloty and US dollars.

This indicator is based on changes in gross external assets and liabilities. It also takes into account the changes in the relative shares of assets and liabilities. This demonstrates that the United States has a net positive position in risky assets and a net negative position in safe assets. The GFC affected nearly two-thirds of developing countries, but the position of the United States is still the largest.

The IMF’s IIP is a compilation of an economy’s external financial assets and liabilities. This data includes financial assets (gold bullion held as reserve assets) and financial liabilities (other countries’ debt). The IIP represents the value of the net position of an economy compared to the value of its external financial assets.

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