www.bi.go.id - Today, December 15, 2011 Fitch Ratings the official rating agency of the Republic of Indonesia, upgraded Indonesia's sovereign credit rating, to BBB- level for foreign currency long-term senior debt, with stable outlook.
Philip McNicholas, Director in Fitch Asia-Pacific Sovereign Ratings group mention in the press release, rationale behind the upgrade is Improved economic performance, strenghtened external liquidity, low and declining public debt ratios, and a prudent overall macro policy framework. (source)
Rapid progress in tackling structural weaknesses combined with sustained economic growth in line with or better than Fitch’s projections without a build-up of external imbalances or a severe inflation shock would enhance Indonesia’s economic and sovereign credit fundamentals and exert upward pressure on the rating. Fitch remains highlighted the structural weaknesses issues such as low average income, low fiscal revenues, shallow domestic financial markets, and problems affecting the business climate including poor physical infrastructure and corruption, remain to be tackled. But these factors do not constrain the rating from the upgrade.
“The upgrade on the Republic’s sovereign credit rating is a recognition for the result of maintaining macroeconomic stability as well as achieving high levels of economic growth amidst global economic and financial uncertainty. By achieving the investment grade level, it is expected that the strengthening of economic fundamentals and structural reforms will continue to support Indonesian investment climate” says Darmin Nasution, Bank Indonesia Governor.
Fitch last rating action for Indonesia was on February 24, 2011, when the sovereign rating change the outlook from BB+/stable to BB+/positive.
Jakarta, 15th December 2011
Office of the Governor
Dyah N.K. Makhijani
Director
Source: http://www.bi.go.id/web/en/Ruang+Media/Siaran+Pers/SP_13452011.htm - Dec 15, 2011
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