S&P Global has maintained Indonesia’s sovereign credit rating at BBB with a stable outlook.

The United States-based rating agency announced the rating on Monday after assessing that Indonesia’s weakened fiscal and external positions were “temporary” and “could be mitigated by higher commodity prices and expenditure cuts”.

The rupiah strengthened from 18,106 per US dollar some 15 minutes before the announcement to Rp 18,057 15 minutes after. Stocks rose at the end of the trading day, with the Indonesia Stocks Exchange (IDX) Composite index closing up 1.92 percent.

S&P wrote in the statement that the weakened fiscal and external positions had been caused by higher energy prices and interest rates, a weakened currency, increased policy uncertainty and accumulated debt.

Nevertheless, the agency maintained the same rating and outlook that Indonesia has been holding since 2022, noting that the deteriorating fiscal and external metrics were temporary. It also mentioned “a more stable pace of policy changes.”

“We believe government efforts to centralize management and reduce leakages in the resource and mineral sectors could eventually increase revenue and export earnings, particularly if policy implementation improves,” reads the statement, referring to the establishment of a commodity export agency called Danantara Sumberdaya Indonesia (DSI).

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