Rating upgraded to strengthen rupiah: BI<\/p>\n
Urip Hudiono, The Jakarta Post\/Jakarta<\/p>\n
Global acknowledgement of the country's macroeconomic stability,
\nas evident in the recent upgrading of Indonesia's debt rating,
\nwould boost positive sentiment in the rupiah, possibly to below
\nthe Rp 9,000 level, according to the central bank.<\/p>\n
The upgrade would also benefit the government's plan to issue
\nup to US$1.5 billion in sovereign bonds during the first quarter
\nof this year, the banks said.<\/p>\n
\"It will certainly create a positive effect on our economy, be
\nit be on our issuance of global bonds, or on the rupiah exchange
\nrate,\" BI deputy governor Aslim Tadjudin said on Friday.<\/p>\n
Confident in the government's clear policies in improving the
\ncountry's economy, global rating agency Fitch Ratings upgraded on
\nThursday Indonesia's long-term foreign and local currency ratings
\nto BB- from B+, and affirmed its short-term rating at B, both
\nwith positive outlooks. The rating remains two-levels from the
\ninvestment grade of BBB-.<\/p>\n
Standard and Poor's, meanwhile, had also recently raised
\nIndonesia's creditworthiness rating. It upgraded Indonesia's
\nlong-term foreign currency to B+ from a B and the local currency
\nrating to BB from B+.<\/p>\n
Reflecting the positive sentiment on Friday, the local unit
\ntraded higher at Rp 9,145 against the dollar, after closing flat
\nat Rp 9,146 the previous day. The Jakarta Stock Exchange's
\nComposite Index, meanwhile, closed at 1,046.48 points, having
\nrisen by 1 percent the day before on news of the Fitch upgrade.<\/p>\n
Aslim said, however, the government still needed to work hard
\nif it wanted to see a further rise in the credit ratings and
\nfurther positive effects on the economy.<\/p>\n
\"The government's commitment to improving the economy is
\nstrong and it has targeted an average 6 percent economic growth
\nover the next five years,\" he said.<\/p>\n
\"But it will still depend on how we proceed on those targets
\n-- the faster we can deliver, the more positive sentiment we can
\ngain.\"<\/p>\n
Aslim added that the rupiah was actually still undervalued,
\nproviding more leeway for further gains.<\/p>\n
\"Foreign currency analysts even predict that the rupiah could
\ngain, to up to Rp 8,500 per dollar,\" he said.<\/p>\n
\"Such a level is also still positive for both importers and
\nexporters.\"<\/p>\n
Meanwhile, finance ministry's fiscal analysis agency head,
\nAnggito Abimanyu, said what was more important from the new
\nratings was their medium-term effects.<\/p>\n
\"It would mean an immediate lowering of our credit risks,
\nresulting in lower interest rates and easier terms and conditions
\nin obtaining credit,\" he said.<\/p>\n
State Minister of National Development Planning Sri Mulyani
\nIndrawati, meanwhile, said she expected global rating agency
\nMoody's, which would issue its rating assessment on the country
\nlater on this quarter, would be fair in reviewing their new debt-
\nrating for Indonesia.<\/p>\n
Sri Mulyani was hopeful the agency would also paint a positive
\noutlook for Indonesia's credit rating in relation to the debt
\nmoratorium granted by creditor nations grouped under the Paris
\nClub to Indonesia.<\/p>\n
\"Of course, they have their independence in determining their
\nrating, but we hope that the debt moratorium from the Paris Club
\nwould not downgrade our rating,\" she said, asserting that
\nIndonesia had not \"requested\" the moratorium, but was offered
\nit\", in light of the tsunami disaster in Aceh.<\/p>\n
At present, Moody rates Indonesia's ceiling for foreign
\ncurrency debt at B2, while its ceiling for foreign-currency bank
\ndeposits is rated B3 -- both considered stable.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rating-upgraded-to-strengthen-rupiah-bi-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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