JAKARTA, NETRALNEWS.COM – Agus Martowardojo, Governor of Bank Indonesia (BI), welcomes the assessment given by international ratings agency Standard and Poor's (S&P) which put Indonesia on Investment Grade by raising Indonesia's rating to BBB- / stable outlook on May 19, 2017.
Now, Indonesia has obtained Investment Grade status from the three major rating agencies. This further confirms the international recognition of Indonesia's success in maintaining macroeconomic stability and financial system and promoting sustainable economic growth amidst uncertain global conditions.
"We are confident that optimism towards Indonesia's economic development is also felt by market participants and other relevant stakeholders, so Bank Indonesia will continue to maintain macroeconomic stability in order to support the Government's ongoing structural reforms and sustainable economic growth," he said in a press release , Friday (19/05/2017),
In a press release, the S & P said the decision was based on fiscal risk reduction as the Government's budget policy was more realistic, limiting the likelihood of significant future deficit deterioration.
This step can also reduce the risk of increasing the ratio of Government debt to GDP and interest payment expense.
On the other hand, S & P is also projecting improved state revenues as a further impact of the acquisition of tax amnesty program data as well as more manageable management of fiscal expenditure.
In addition, Indonesia is considered to have demonstrated effective policy formulation to support sustainable government finance and balanced economic growth.
Furthermore, S & P states Bank Indonesia as a central bank plays a key role in maintaining economic growth by reducing the impact of economic and financial turmoil on macroeconomic stability.
In this regard, inflation can be maintained and in line with major trading partner countries, BI's independence in maintaining the achievement of monetary policy targets can be maintained, the use of market-based instruments in the implementation of monetary policy is greater, and the application of Rupiah exchange rate flexibility is increasing.
S & P previously affirmed Indonesia's rating at BB + / Outlook Positive level on June 1, 2016.