Indonesian Central Bank

"Landep News"

The Indonesian Central Bank Governor Darmin Nasution is optimistic that Indonesia will soon obtain investment grade status in the midst of a world economic recovery slowdown.

“We still believe in a not too long time Indonesia will rise to investment grade and it is something to be thankful for that when other countries are falling, we are going up” he said when met on Thursday.

Indonesian Central Bank

Darmin explained that rating agencies always provide an assessment at the beginning of the year and it can not be ascertained exactly when Indonesia obtained investment grade status.

“They provide an assessment at the beginning of the year, but we’re trying to discuss whether there is more faster assessment, so (at the moment) it is hard to say that later this year it could be better,” he said.

According to him, Indonesia’s economy is very good and the potential to reach investment grade only a matter of time but there are other things considered by these rating agencies in their assessments.

“Offcourse there will be things that require further clarification (or items) that needs to be improved. As always, they are willing to talk, what the obstacles are and what needs fixing,” Nasution said.

He said if Indonesia managed to be categorized as a country with investment grade, Indonesia will be flooded with long-term source of cheap funds such as pension funds and insurance.

“Usually the pension funds in developed countries will refrain from entering a country if not investment grade. Pension funds are long-term funds and cheap, so if you have an investment grade status, flow of fund will be greater,” he said.

Responding to the possible reduction in the debt rating of the United States (U.S.) by rating agency Moody’s, Nasution explained that it will not affect much on the U.S. economy.

“That is usual, there is an audit without exceptions or with exceptions. If there is one thing that is considered not well done, it usually will not affect many of the assessments and the country’s economy,” he added.

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