BI: S&P Report Reflects Global Investor Confidence in Indonesia

Bank Indonesia (BI) has responded to the decision by international rating agency S&P Global Ratings to maintain Indonesia’s sovereign credit rating at BBB for the long term and A-2 for the short term, with a stable outlook. Senior Deputy Governor of Bank Indonesia Destry Damayanti stated that S&P’s assessment reflects strong global investor confidence in the government and Bank Indonesia’s management of the economy, as well as sound policy coordination between fiscal and monetary authorities. “Alhamdulillah, the results of S&P’s assessment reflect good global investor confidence in the Indonesian Government’s economic management and the good coordination between fiscal and monetary policy,” she explained on Monday. Destry underscored that this strong investor confidence is reflected in the return of foreign capital flows to Indonesia’s financial markets, particularly into Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI). According to BI’s records, foreign capital inflows into SBN and SRBI during June up to the first week of July reached Rp 31 trillion and Rp 74 trillion respectively, totalling US$5.8 billion (Rp 105 trillion). Destry affirmed that going forward, BI will continue its commitment to maintaining rupiah stability to encourage foreign fund inflows into the Indonesian economy. She also stressed that the central bank sees considerable room for rupiah appreciation. “BI currently sees that the room for rupiah appreciation remains quite large, especially with the improvement in investor confidence towards the Indonesian economy,” she asserted.