A mixed outlook for Indonesia

Fitch lowers its outlook on the sovereign credit rating for Indonesia to stable from positive days after Standard & PoorÆs flip-flopped its rating the other way around.

By Lara Wozniak

February 15, 2006

On Monday, Fitch Ratings revised the outlook on the foreign currency issuer default rating and local currency issuer default rating of Indonesia to stable from positive, while affirming both ratings at 'BB-'.

But on February 9 Standard Poor's Ratings Services changed its outlook on the sovereign credit ratings for Indonesia to positive from stable.

The revision to the outlook on Indonesia's sovereign ratings reflects concerns over risks to the external balance sheet that need to be addressed with greater urgency and importance, says Ai Ling Ngiam, associate director in Fitch's sovereign ratings team in Hong Kong. The reversal towards a weakening in the current account balance position coincides with a period of heavy public sector...

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