S&P upgrades RI credit rating to CCC+<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
International rating agency Standard & Poor's raised on
\nThursday its long-term foreign currency sovereign credit rating
\non Indonesia to CCC+ from selective default and assigned the
\nrating a stable outlook.<\/p>\n
S&P said the upgrade followed the completion of the
\nrescheduling of commercial loans owed to private creditors
\ngrouped under the London Club.<\/p>\n
In April, S&P downgraded the country's long-term foreign
\ncurrency rating to selective default from CCC previously
\nfollowing a rescheduling agreement reached with the Paris Club of
\ncreditor nations over some US$5.4 billion in sovereign debts
\nmaturing this year and 2003.<\/p>\n
S&P argued at the time that Indonesia was technically in
\ndefault until private creditors under the London Club also agreed
\nto the terms of the Paris Club deal.<\/p>\n
The Paris Club required Indonesia to also seek the same
\ntreatment from the private creditors under a comparability
\nruling.<\/p>\n
Anton Gunawan, an economist at Citibank, said that the rating
\nupgrade would not necessarily lower the borrowing cost for
\ninvesting in Indonesia because of various uncertainties still
\nplaguing the country.<\/p>\n
\"At CCC+, the borrowing cost is still high,\" Anton told The
\nJakarta Post.<\/p>\n
He urged the government to continue showing commitment to the
\nreform program to improve the situation.<\/p>\n
He added that the upgrade had been widely expected, and
\nCitibank had actually expected the rating to be raised to B-.<\/p>\n
\"But S&P is still worried about (fiscal) problem in 2004,\" he
\nsaid.<\/p>\n
S&P said that the government would have to seek another debt
\nrescheduling facility from the Paris Club for debts maturing in
\n2004, a move which would put Indonesia in default status again
\nuntil it obtained similar deal from London Club.<\/p>\n
\"Notwithstanding Indonesia's high level of international
\nreserves of nearly $30 billion, S&P expects the government to
\nseek its fourth Paris Club agreement late next year,\" the rating
\nagency said.<\/p>\n
Meanwhile, the Jakarta stock index ended Thursday 1.6 percent
\nhigher at 427.119, but dealers said that this was mainly due to
\ntechnical rebound in selective blue-chip firms.<\/p>\n
The rupiah remained stable at Rp 8,865 per U.S. dollar.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/sp-upgrades-ri-credit-rating-to-ccc-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }