IBCA may cut RI rating

Sat, 13 Jun 1998 | Source: REUTERS

LONDON (Reuters): Fitch IBCA said yesterday it was keeping the rating on Indonesia at B minus and on RatingAlert negative despite the recent debt agreement the country signed with a steering committee of 13 banks.

The deal represented an important step on the long road towards regaining access to international capital markets, the rating agency said in a statement.

"However, the agency warns that it would be wrong to regard this as an overnight panacea for resolving the country's external payment difficulties."

The external payment situation remained "extremely fragile".

"Unlike the other troubled Asian nations Korea and Thailand, Indonesia has yet to see a strong rebound in its current account position."

"Recent steps to liberalize the foreign investment climate and accelerate privatization are to be welcomed, but those alone will not reverse the outflow," Fitch IBCA added. "Economic stabilization must come first."

View JSON | Print