TEMPO.CO, Jakarta - Japan Credit Rating Agency (JCR) has upgraded the rating of Indonesia`s long-term, foreign-denominated debt from BBB- to BBB with a stable outlook. For debts denominated in rupiah, the rating is raised from BBB to BBB+, also with a stable outlook.
The rating's upgrade is based on Joko Widodo’s administration’s structural reform that has brought positive results to investment climates, supported by infrastructure development and declining foreign loans.
The improving investment climate can be seen in the series of economic policy packages, increasing investments by domestic investors, faster direct investments, and aggressive infrastructure projects.
Indonesia’s foreign debts by the private sector has also been declining since 2016 following Bank Indonesia’s (BI) rule on prudentiality that enhances resilience to external instabilities.
The JCR will actively monitor infrastructure funding by the private sector as well as the government’s tax revenue following the tax amnesty program.