Indonesia’s foreign and local-currency sovereign debt ratings were upgraded on September 16th to Ba2 from Ba3 at Moody’s Investors Service, which cited the nation’s economic resilience.
Indonesia’s relatively strong resilience to the global recession as well as its healthy medium-term growth prospects prompted the rating upgrade. The nation’s improving economic management and its “appropriate policy stance” also highlight “the growing credibility and predictability of government policies,” Mitra said, Moody’s vice president and sovereign analyst for Indonesia.
Indonesia’s economy expanded 4 percent in the second quarter from a year earlier, the fastest pace in Southeast Asia, as its reliance on domestic consumption helped cushion the impact of falling exports. The World Bank on September 14th raised its growth forecast for Indonesia’s economy to 4.3 percent from 3.5 percent.
Source: Bloomberg.net
This upgrade ranking changes the country risk premium for Indonesia. From the previous post, Indonesia’s country risk premium was 4.5% (Moody’s rating Ba3). Now, the country risk premium down to 3.75% and made the total risk premium lower to 8.54%.
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