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Moody's restores Indonesia investment-grade ratingMoody's Investors Service on Wednesday restored Indonesia's investment grade sovereign credit rating, weeks after a similar move by rival ratings agency Fitch.18.01.2012 Moody's Investors Service on Wednesday restored Indonesia's investment grade sovereign credit rating, weeks after a similar move by rival ratings agency Fitch. Moody's said its decision to move Southeast Asia's biggest economy to Baa3 from Ba1 with a stable outlook came because of Indonesia's success in shrinking its debt-to-gross domestic product ratio. "Indonesia's cyclical resilience to large external shocks points to sustainably high trend growth over the medium term," Moody's said in a statement. "A more favourable assessment of Indonesia's economic strength is underpinned by gains in investment spending, improved prospects for infrastructure development following key policy reforms, and a well-managed financial system," it added. Moody's added that "Indonesia's fiscal ratios now surpass many of its higher-rated peers." Fitch upgraded Indonesia back to investment grade after 14 years of junk status, citing a decade of steady growth and rigorous reforms to lower the debt-to-GDP ratio. Chua Hak Bin, an economist for Merrill Lynch in Jakarta, earlier said an upgrade to Indonesia's credit rating was long overdue. "It is about time, since Indonesia has balanced fiscal and robust future growth," he told AFP. "With this, there will be a larger pool of funds especially for government bonds. There will be more countries that are now able to invest in Indonesia." Earlier this month Jakarta held its first 30-year global bond sale in 2008, with the government saying it had raised $1.75 billion. The sale was part of the government's plan to issue a total of $15 billion in global medium-term notes in the coming years, higher than the $9 billion planned last year. The country needs overseas funds to help plug its 125.6 trillion rupiah ($13.7 billion) projected deficit for this year, about 1.5 percent of gross domestic product. Source: Yahoo |
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