REPUBLIKA.CO.ID, JAKARTA - Indonesia won a rating upgrade at Moody’s Investors Service, which became the second credit assessor in a month to return the country to investment level for the first time since the Asian financial crisis. Earlier, Fitch Ratings lifted Indonesia's sovereign credit rating to investment grade for the first time in more than a decade. Yet, Standard & Poor's still rates Southeast Asia's biggest economy one notch below investment grade.

The foreign- and local-currency rating was increased to Baa3 from Ba1, Moody’s said in a statement today, reported in Bloomberg on Wednesday. The outlook is stable. The upgrade brings Southeast Asia’s largest economy to the lowest investment grade, the same level as India, according to data compiled by Bloomberg.

Fitch now rates Indonesia's long-term foreign and local currency issuer default rating at triple-B-minus, the lowest investment-grade rating, with a stable outlook. The move is expected to trigger more investment in Southeast Asia's largest economy, according to a report in The Wall Street Journal, earlier this week.

Fitch said Indonesia had earned the upgrade through a combination of resilient economic growth, low government debt and prudent policy. Indonesia lost the coveted investment-grade status in 1997 during the Asian financial crisis. The upgrade comes at a time when some European countries are struggling with their own crisis and being downgraded to junk status.

"Indonesia's domestically oriented economy and success in delivering relatively strong economic growth without the creating of external imbalances, or a reliance on short-term external financing suggests economic-growth prospects should prove resilient to external shocks, as was the case in 2008," the ratings firm said.

The vote of confidence is important for Indonesia—which is has the world's fourth largest population after China, India and the US. The rating will encourage much-needed investment and possibly lower the cost of raising money. 

"An upgrade amid deteriorating global economic conditions shows declining investment risk, which will make [Indonesia] more attractive for capital inflows," said Hartadi Sarwono, a deputy governor at Indonesia's central bank. 

Ikuti Whatsapp Channel Republika