JAKARTA (TheInsiderStories) - Standard & Poor’s (S&P) Director of Sovereign & International Public Finance Rating Kyran Curry said the rating agency sees the possibility for Indonesian rating to be lifted from BB+ (outlook positive) to investment grade.
He made the statement after S&P senior executives met with the Indonesian President Joko Widodo and economic ministers.
Earlier, President Joko Widodo has asked ministries and government institutions to prioritize Indonesia’s ease of doing business in order to boost the country’s sovereign rating to investment grade. The President’s statement refers to the recent Economic Policy Package, which focused in cutting down investment procedures – from 94 to 49 procedures.
“It’s possible. Some of outlooks about natural change of 1/3 to make it higher little bit next year. We need to look another numbers and then we have to decide,” he said after met with the Coordinating Minister for Economic Affairs Darmin Nasution.
The other rating agencies, Moody’s and Fitch Rating have given Indonesia a good reviews, while the Standard and Poor (S&P) still places Indonesia on bottom level, with BB+ rating.
In his meeting with Nasution, Kyran admitted that the explanations given show Indonesia’s economic development is progressing. The agency considers the Indonesian government has explained all things well. He also met some government officials to get information and reviews.
S&P expects to announce the results of the assessment of the top bond rating of Indonesia one month after the meeting, coinciding with the annual agenda of the S&P which usually provides rating votes from May to June.
According to him, the minister was very positive about Indonesia’s economic progress, and it is very pleased with the objectivity and fluency of Minister Nasution in mastering the material they were asking.
While, the Executive Director of Macroeconomic Policy for Bank Indonesia Juda Agung gives his view during the discussion with S&P, their tone seems to be positive as well, Kyran said. S&P has recognized the positive things that have happened, including macroeconomic stability, structural reform, especially reform of energy subsidies.
On the monetary side, inflation also continued to show a downward trend, while pressure on the exchange rate reduced, and foreign exchange reserves improved to a level of US$107.7 billion as of end April. Although, he does not highlight technical issues such as the planned adoption of 7 days reverse repo policy as the benchmark interest rate policy and the establishment of market deepening divisions, but the S & P generally views Indonesia’s economic fundamentals have improved. (*)