No Reason for Not Granting Indonesia Investment Grade, Says Senior Minister

The Standard & Poor’s logo at the company’s headquarters in New York.

Jakarta, 25 Jumadil Akhir 1438/24 March 2017 (MINA) – Chief Economic Minister Darmin Nasution said the government has shown that the international rating agency Standard and Poors (S&P) has no reason for not raising the Indonesian debt rating to investment grade.

“We have made improvement and reform, but the government leaves it to them to decide whether Indonesia deserves or not the rating of investment grade,” Antara quoted Darmin as saying at a FinTechStage Inclusion Forum ceremony at Jakarta Convention Centre (JCC), here on Thursday.

On Wednesday, S&P visited Darmin at his office but Darmin said S&P came mainly to ask about Indonesian fiscal and economic condition.

“Yesterday they asked a lot about fiscal reform. Why fiscal? Last year we did have problem and they had criticized it. They wanted to know the problem precisely. We explained and they understood,” he said.

The government of Indonesia did hope S&P to immediately raise the Indonesian debt rating to investment grade as the government has improved the structure of its state budget to be healthier, he said.

Of the three international rating agencies – S&P, Fitch and Moodys – only S&P has not granted Indonesia the rating S&P still keeps the BB+ rating for the countrys long term debts with positive prospect and B rating for short term debts.

S&P said it would not rule out an increase in Indonesia’s rating with improvement in fiscal performance and success in reducing budget deficit and loans.

Economist from Bank Mandiri Anton Gunawan said the New York rating agency was trapped in its own system putting it lagging behind other rating agencies.

For investors, Indonesia is already at the level of investment grade, Anton said. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)