International rating agency Moody’s Investors Service revised the outlook of Indonesia’s foreign debt ratings to positive from stable. Currently, the ranking of foreign debt in foreign currency (forex) as well as the local currency at the level of Ba2.
Indonesia’s debt rating outlook revised open the opportunity to increase Indonesia’s debt rating to investment grade levels within the next year. Indonesia still needs as much as two-level increase in ratings again before reaching the level of investment.
In a press release, Moody’s said the positive outlook reflects the strengthening of the Indonesian economy to continue sustainable growth. This is balanced by the effectiveness of fiscal and monetary policy stability, as well as expectations of
improvement of government finances and debt position.
“Macroeconomic fundamentals, the government debt ratio continued to decline, and fiscal policy support and a smooth careful structural reforms, an expected positive momentum can be maintained in an effort to target investment grade,” said Agus Hartadi Sarwono, Deputy Governor of the Bank Indonesia, Monday (21/06/2010).
Revision of Indonesia’s debt outlook from Moody’s is in line with expectations and it has been properly changed for the better prospects for Moody’s noted lower compared with the prospect of a set of Standard & Poor’s (BB / positive) and Fitch (BB + / Stable).
Principal analyst for Moody’s to Indonesia’s foreign debt, ie Aninda Mitra, and Thomas J. Byrne, said the key to economic growth in Indonesia is a large domestic market which is managed appropriately within the framework of economic policy and has been well tested. They also claimed, several external disturbances such as the instability in some European debt markets are not serious about the fundamental implications of Indonesia’s debt is fixed on an improving trend
