Moody's puts RI on review for possible upgrade<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
A substantial reduction in government debt ratios and reduced
\nexternal vulnerability have prompted Moody's Investors Service to
\nplace Indonesia's ratings on review for possible upgrade.<\/p>\n
The ratings under review are the B3 foreign currency country
\nceiling for debt, the B3 rating of the foreign currency bonds of
\nthe government of Indonesia, the B3 domestic currency issuer
\nrating of the government, and the Caa1 foreign currency bank
\ndeposit ceiling.<\/p>\n
Moody's said on Thursday in a statement that the country's
\nimproved debt ratios were due to the fiscal policy that had been
\npursued by the government and to the strengthening of the
\nexchange rate.<\/p>\n
In addition, the external vulnerability of the country has
\nbeen considerably reduced as the current account has remained in
\nsurplus, external debt of both the government and the private
\nsector has been restructured, and international reserves have
\nrisen.<\/p>\n
Despite these improvements, the rating agency believed that
\nIndonesia remained vulnerable to unforeseen shocks, either
\ninternal or external.<\/p>\n
In addition, economic growth has not yet returned to a rate
\nthat would contribute to increases in employment and living
\nstandards over the medium term. As a result, political and social
\nstability could also be vulnerable to any negative shocks.<\/p>\n
\"Improvements in the investment climate could alleviate some
\nof this problem,\" it said.<\/p>\n
The review of the ratings will concentrate on the country's
\nexternal financing requirements and their viability over the next
\ncouple of years.<\/p>\n
The Indonesian government is considering whether or not to
\nrequest a new IMF program after the expiration of the current
\nextended facility at the end of this year. The country's external
\nfinancial position could be more vulnerable than otherwise
\nwithout further funding from the IMF and the option of a third
\nParis Club rescheduling of official bilateral debt.<\/p>\n
In a related development, Moody's placed the Caa1 long-term
\nbank deposit country ceiling ratings of eight Indonesian banks on
\nreview for possible upgrade.<\/p>\n
The eight banks are Bank Danamon Indonesia, Bank Internasional
\nIndonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata,
\nBank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia
\nBank.<\/p>\n
At the same time, the agency placed on review for possible
\nupgrade the B3 senior debt ratings for Bank Mandiri and Bank
\nNegara Indonesia. The Not-Prime short-term deposit and bank
\nfinancial strength ratings of all eight banks are unaffected.<\/p>\n
In addition, the B3 subordinated debt ratings of Bank Mandiri
\nand Bank Negara Indonesia are unaffected. The ratings are
\ndetailed below.<\/p>\n
\"This action follows the placement of Indonesia's sovereign
\nratings - B3 foreign currency country ceiling for debt, B3
\nforeign currency bonds of the government, B3 domestic currency
\nissuer rating of the government and Caa1 foreign currency bank
\ndeposit ceiling - on review for possible upgrade,\" it said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/moodys-puts-ri-on-review-for-possible-upgrade-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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