Fitch Ratings announced on Friday that it affirmed Indonesia’s long-term foreign- and local-currency issuer default ratings at ‘BBB-’

The issue ratings on Indonesia’s senior unsecured foreign- and local-currency bonds were also affirmed at ‘BBB-’.

The outlooks on the long-term rupiah (IDRs) were stable, it said, adding that the country ceiling was affirmed at ‘BBB’ and the short-term foreign-currency IDR affirmed at ‘F3’.

The affirmation of the ratings and stable outlook reflected the government’s ability to mitigate the negative impact on external balances after markets came under pressure following investors’ expectations that the US Federal Reserve would begin to unwind its monetary stimulus.

In particular, Bank Indonesia helped to protect its foreign reserves by allowing the exchange rate to depreciate and raising its policy rates by 175 bp to 7.5 percent since June.

Moreover, market access remained intact for both sovereign and financial institutions.

Indonesia’s sovereign credit profile has benefited from stronger and less volatile economic growth than its peers rated in the ‘BBB’ range. Fitch projects GDP growth to slow to 5.3 percent in 2014 from 5.5 percent in 2013 and 6.2 percent in 2012 due to the adjustment in external finances, fading consumer confidence and reduced income from commodities. (The Jakarta Post)

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