Japan Credit Rating Agency raised Indonesia’s sovereign debt rating to investment grade in a move that could be followed by major rating agencies, reflecting growing confidence in the management of Southeast Asia’s largest economy.
The agency raised Indonesia’s foreign currency rating by a notch to BBB-minus and said the country could “sustain modest economic growth while maintaining macroeconomic stability and fiscal soundness in the years to come.”
The move could be a boost to Indonesia’s plan to issue samurai bonds to Japan’s debt investors who, although yield-hungry, are cautious of junk-rated issuers.
In February, Philippines issued samurai bonds, or yen bonds issued in Japan by non-Japanese entities, to raise 100 billion yen, much below the initial target of $1 billion. Philippines is rated BBB-minus by JCR.