Singapore, February 08, 2017 -- Moody's Investors Service has today revised the outlook on Indonesia's government ratings to positive from stable.
Concurrently, Moody's has affirmed Indonesia's Baa3 issuer rating, Baa3 senior unsecured bond ratings, and (P)Baa3 senior unsecured MTN program rating.
The key drivers of the change in outlook are emerging signs of a reduction in structural constraints on Indonesia's rating, including its level of external vulnerability and the strength of its institutions:
1) Indonesia's vulnerability to external shocks is declining somewhat and is expected to continue to do so, as a result of measures fostering narrower current account deficits, higher foreign exchange reserves, and a slower rise in private sector external debt; and
2) Indonesia's lengthening track record of macroeconomic stability and fiscal discipline, together with its measured but ongoing progress on structural economic, fiscal and regulatory reforms, suggest that policy effectiveness is improving.
Moody's has affirmed the (P)Baa3 senior unsecured MTN programme rating and Baa3 senior unsecured ratings of the US dollar trust certificates issued by Perusahaan Penerbit SBSN Indonesia III, a special purpose vehicle established by the Government of Indonesia.
The payment obligations associated with these certificates are direct obligations of the government, and their ratings automatically reflect changes to Indonesia's sovereign ratings.