The Credit Rating of Indonesian Government Debt is Upgraded by Fitch

Fitch, one of the world rating agency, on Thursday (12.15.2011), raised Indonesia's debt rating from BB + to BBB-rated as an investment grade as 15 years ago.

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The increase in these ratings would reduce the risk in investing in Indonesia and lure foreign investors to the Indonesian market. According to economist in Samuel Securities, Lana Soelistianingsih, although the increase is quite surprising because was expected to be given in 2012, investors have predicted this possibility, considering the development of Indonesia's solid macroeconomic performance.

Earlier, on February 24, 2011, Fitch raised Indonesian outlook from stable to positive. The economic growth remained high at 6.5 percent with the low inflation rate (less than 4 percent), a stable exchange rate, low level of budget deficits and healthy GDP ratio, "Lana said in Jakarta on Friday (16 / 12/2011).

This news is expected to increase the stock and money markets today. The negative sentiment on global markets spread to Asia yesterday.

Asian currencies weakened against the U.S. dollar, including the rupiah closed down slightly to Rp 9091 per U.S. dollar (Bloomberg middle rate).

Lana estimates, Asian markets will bounce back positive today because there is an improvement in global markets sentiment. The Indonesian market will experience a euphoric welcoming Fitch's investment grade rating. Indonesian Rupiah is expected to strengthen in the range of Rp 9020 to Rp 9050 per U.S. dollar.

Source: Kompas