Moody's lowers Indonesian rating

Moody's lowers Indonesian rating

HONG KONG (Dow Jones): Moody's Investors Service has changed the outlook for Indonesia's B3 foreign currency country ceiling and Caa1 foreign currency bank deposit ceiling to stable from positive.

Moody's said Tuesday that a number of indicators showed an improving economic performance during 2000. Economic growth, at 4.8 percent, was a substantial increase from the depressed levels recorded previously.

The fiscal deficit came in under the originally projected level. Furthermore, the external accounts performed relatively favorably.

Nevertheless, Moody's believes that the political problems facing Indonesia and their effect on economic management and on the relationship with official creditors indicate that it is unlikely that the rating agency would upgrade Indonesia's ratings in coming months.

While external liquidity is adequate, it could deteriorate if relations with official creditors do not improve. Furthermore, the country's very high level of public sector debt in relation to GDP means that there is little room for policy slippage.

As a result of these factors, a stable outlook for the ratings is more appropriate at this time, it added.

Moody's also said it changed the rating outlook to stable from positive on Sampoerna International Finance Co BV's senior unsecured notes, guaranteed by PT Hanjaya Mandala Sampoerna.

It said the change in outlook reflects its decision to change the outlook for Indonesia's B3 foreign currency country ceiling and Caa1 foreign currency bank deposit ceiling to stable from positive.

PT Hanjaya Mandala Sampoerna, headquartered in Surabaya, Indonesia, is a leading cigarette company that manufactures and markets the premium kretek brands in the country.

Sampoerna International Finance Co BV, is a finance subsidiary of Sampoerna.