RATING INDONESIA - JAKARTA. Japan Credit Rating Agency Ltd. has raised Indonesia's Sovereign Debt Rating from BBB- with positive prosoective to BBB with stable prospect.
Economic structural reform that has been carried out to achieve sustainable growth has brought a positive impact to improve investment climate, infrastructure development and slow corporate foreign debt withdrawals, Antara learned here on Thursday from JCR official statement.
"Private foreign debt has grown limitedly since 2016 because of the implementation of prudent regulations by the central bank that led to increasing economic resilience against external pressure," according to JCR.
JCR also viewed economic policy packages and reduction of Bank Indonesia reference rate as having boosted private investment especially in the non-commodities sector. The decline in the current account deficit and high foreign exchange reserve has also reflected the increasing resilience of Indonesia's economy, it said.
"Indonesia's banking sector has remained healthy and financing through financial market has grown strongly reflected by increasing issuence of shares, bonds and medium debt securities," JCR states.
As for the fiscal condition, JCR admits that fiscal reform that has been carried out by the government in the form of shifting subsidy spending to infrastructure, health and education spending has been able to help reduce fiscal deficit and increase spending efficiency.
In a written statement Bank Indonesia governor Agus Martowardojo said JCR's decision to raise Indonesia's debt rating reflected international institutions' confidence in the economic structural reform being carried out by Indonesia.
"This also shows that the harmonious synergy between Bank Indonesia and the government has been able to safeguard macro-economic stability and financial system," he said.
JCR improved Indonesia's sovereign debt rating from stable to positive and at the same time affirmed the rating to BBB- (investment grade) on March 7, 2017.
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