RATINGS - Rupiah Advances After Fitch Raises Indonesia’s Rating Outlook

Indonesia’s rupiah gained on Friday after Fitch Ratings raised its outlook on Southeast Asia’s biggest economy to positive from stable.

The company affirmed its BB+ grade on the nation’s local- and foreign-currency debt yesterday, one step below investment grade. The rupiah has advanced 1.3 percent this year, the best performance among Asia’s 10 most-traded currencies, as official data show overseas funds increased holdings of Indonesian government bonds by 2 percent from the end of last year to 199.8 trillion rupiah ($22.6 billion) as of Feb. 22. (source)

“The report will fan expectations of Indonesia achieving investment-grade rating soon,” said Joanna Tan, a Singapore- based economist at Forecast Singapore Pte. “That’s definitely positive for the rupiah.”

The rupiah strengthened 0.2 percent to 8,859 per dollar as of 9:00 a.m. in Jakarta, according to data compiled by Bloomberg. The currency is little changed this week.

Moody’s Investors Service raised Indonesia’s credit rating to the highest level since the 1997 Asian financial crisis last month, citing the nation’s “economic resilience” and improving public debt position. Moody’s Ba1 rating is also one step below investment grade.

Standard and Poor’s lifted Indonesia’s sovereign credit rating to BB from BB- in March, two levels below investment grade, with a positive outlook.

Source : http://www.thejakartaglobe.com/markets/rupiah-advances-after-fitch-raises-indonesias-rating-outlook/424994- Feb 25, 2011