Pakistan Information & News

Indonesia received some good news when Standard & Poor’s raised its long-term foreign currency rating. Referring to the nation’s falling debt and inflows of foreign investment, the credit rating agency lifted its rating to BB- from B+. The agency also lifted the long-term local currency rating of Indonesia from BB to BB+. The ratings have been upgraded keeping in mind Indonesia’s fiscal and external performance, which are improving. The agency also stated that the rise in Indonesia’s foreign direct investment is due to the healthy democratic government and the infrastructure development and financial reforms it has undertaken.
But Standard & Poor’s continues to rate Indonesian bonds as below investment grade. This did not stop the government from swapping treasury bonds worth USD 256 million for new ones. This was undertaken as part of the effort to restructure Indonesia’s outstanding bond debt. An open auction saw a total of IDR 2.6 trillion in bids received from bondholders. It just reflects the government’s preference to rely on bonds to finance the budget instead of overseas borrowing or privatization. The government hopes to raise IDR 35.8 trillion in net proceeds from bond sales this year to help fill the budget deficit.
The mood is upbeat with even the governor of Bank Indonesia (BI) hopeful about Indonesia’s ability to pay off its debt to the International Monetary Fund (IMF) in 2007. Indonesia owes the IMF about USD 7.5 billion, which has been deposited to add to foreign exchange reserves. He stated that the country’s foreign reserves of USD 44 million are adequate for the payment of the debt installments.

Read more at Banshi Talukdar

Popularity: 1% [?]