Bank Indonesia (BI) has said it would continue to coordinate with government institutions to maintain the country’s macroeconomic stability and foster growth following international rating agency Standard & Poor’s (S&P) Global Ratings’ investment grade rating for Indonesia.
On Thursday, S&P Global Ratings announced Indonesia’s sovereign rating at BBB- with a stable outlook, maintaining the same rating as in 2017. A number of considerations to this decision include the relatively low government debt burden and moderate level of foreign debt.
Further, the government’s debt to gross domestic product (GDP) ratio is projected to be stable. The country’s current-account deficit is also expected to narrow in the next few years.
BI Governor Perry Warjiyo said the central bank would continue to work to maintain the country’s macroeconomic stability. He added that the rating was a reflection of the country’s positive economic conditions and credible policy framework.
“The affirmation strengthens investor confidence in Indonesia’s prospects amid the continuing global uncertainty,” Perry said in a statement on Thursday.
It took exactly 20 years for Indonesia — since the 1997 Asian financial crisis — to fully regain its investment grade status from S&P. For years, S&P insisted on maintaining the country’s rating at junk grade, arguing that it still had serious concern over its economic growth and rising bad debts. S&P awarded a BBB rating with stable outlook to Indonesia in 1996, a year before the crisis, and BBB- with negative outlook in 1997. (dwa)