Moody's Affirms Indonesia's Debt Rating Amidst Gloomy External: How?

Rating agency Moody's affirmed the Republic of Indonesia's Sovereign Credit Rating at Baa2, one level above investment grade, with a stable outlook on Apr. 16. Moody's sees this affirmation as consistent with its assessment that Indonesia's economic resilience remains intact, buoyed by high and stable economic growth.

The credibility of both the central bank's monetary and the government's fiscal policies underpin this achievement. Various innovations in monetary policy instruments, including a new short-term rupiah-denominated debt instrument aimed at attracting portfolio inflows back into short-term securities, are seen as successful in bolstering external resilience. This success is reflected in metrics such as the current account balance and the adequacy of foreign exchange reserves.

Governor of Bank Indonesia Perry Warjiyo remarked that Moody's affirmation reflects strong confidence from international stakeholders in Indonesia's sustained macroeconomic stability and positive medium-term economic prospects. "Moving forward, Bank Indonesia will continue to monitor global and domestic economic and financial developments, formulate and implement necessary policy measures to ensure macroeconomic and financial system stability, and strengthen policy coordination with the government to support sustainable economic growth," he affirmed.