www.bi.go.id - Fitch Ratings has today (February 24, 2011) affirmed Indonesia’s long-term foreign and local currency issuer default ratings (IDRs) at ‘BB+’ and revised the outlooks on both to Positive from Stable.
The Governor of Bank Indonesia, Darmin Nasution said that the establishment of a positive outlook on the Republic’s sovereign credit rating in the midst of inflationary pressure risks and current economic challenges, reflects international confidence in the credibility of economic authority in managing the economy of Indonesia. Indonesia is only one step away toward the investment grade category. Indonesia has been proven to remain strong during the difficult times and supported by sound macroeconomic fundamentals as well as increasing level of investment to support further growth so that Indonesia will be able to catch up the gap to immediately enter the investment grade sovereign rating category. (source)
"The Positive Outlook reflects Fitch's view that Indonesia's favourable macroeconomic prospects are likely to see the credit profile strengthen further over the next twelve to eighteen months, despite near-term risks from inflation and potentially volatile capital flows," said Andrew Colquhoun, Senior Director and Head of Asia-Pacific Sovereign Ratings at Fitch, the main sovereign analyst for the Republic of Indonesia.
In the press release today, Fitch stated key factors supporting this action were strong economic growth, well above of the ‘BB’ and ‘BBB’ range medians. Encouragingly, Indonesia’s growth has not been accompanied by the emergence of potentially-risky external imbalances – rising savings rates have largely matched the growing investment, and especially the performance of Indonesia's balance of payments. Modest current account surplus is always maintained since 1998. The strengthening of foreign exchange reserves reached USD96.2 billion, equivalent to 7 months of imports and debt payments become critical factors that support the credit profile of Indonesia.
Jakarta, 24 February 2011
Office of the Governor
Benny Siswanto
Head of Bureau
Source: http://www.bi.go.id/web/en/Ruang+Media/Siaran+Pers/Siaran+Pers+130611.htm - Feb 24, 2011
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