Fitch Outlook: OJK reiterates that the fundamentals of the financial sector remain strong

Jakarta — the Financial Services Authority (OJK) has confirmed that the fundamentals of Indonesia’s financial sector remain strong, even as Fitch Ratings revises Indonesia’s sovereign credit rating outlook from stable to negative. “The Indonesian financial system is also supported by a robust supervisory framework, and we will continue structural reforms to increase transparency, deepen the capital market, and strengthen investor confidence in the long term,” said Acting Chairperson Friderica Widyasari Dewi in a statement in Jakarta on Thursday. Friderica, who is commonly known as Kiki, explained that the capital adequacy of financial services institutions remains well above the minimum requirements, liquidity remains adequate, and risk profiles are prudently managed. Financial intermediation also continues to grow in line with the economy’s fundamentals, thereby supporting financing for the productive sector and long-term development. These reforms include enhancing ownership transparency, strengthening free float provisions, refining investor data classifications, and stringent law enforcement to strengthen governance and market integrity. It is worth noting that despite revising the outlook, Fitch Ratings maintains Indonesia’s sovereign credit rating at BBB. The outlook revision, according to Fitch, reflects developments in external risk and dynamic policy measures, and does not represent a direct reassessment of Indonesia’s credit fundamentals or the resilience of the national financial system. Kiki stated that OJK is currently monitoring Fitch Ratings’ outlook revision and the considerations underlying the assessment. OJK, together with the Government and related authorities, continues to strengthen policy coordination to keep the financial sector conditions conducive so that economic growth can continue in a stable and resilient manner. OJK also views Fitch’s assessment that places Indonesia comparatively better than a number of its peers as a reflection of confidence in Indonesia’s policy capacity and institutional resilience.