REPUBLIKA.CO.ID, JAKARTA - International rating agency, Fitch Ratings explained that government policies would be key factors to achieve Indonesian economic stability. Fitch does not downgrade Indonesian rating despite the weakening IDR but it said foreign exchange reserves were depressed.
Fitch explaines that debt rating of Indonesia and India are still in stable outlook or BBB minus. Weakening of IDR and INR has reflected significant deficit of current account in both countries.
Current account deficit in second quarter 2013 increased to 4.4 percent of gross domestic product (GDP). Meanwhile, balance of payment deficit decreased from 6.6 billion USD to 2.47 billion USD. It has reduced the foreign exchange reserves, from 124.6 billion USD in August 2011 to 92.671 billion USD in August 2013.
"We need foreign exchange reserves to maintain the value of IDR against USD. If other currencies weakened against USD, but Indonesia remains at a specific rate, I believe our financial authorities will not find any difficulties to balance foreign exchange reserves," Vice President Boediono said recently.
An economist from Gadjah Mada University, Tony Prasentiantono said government needed to restructure its debt to rescue Indonesian economy. Until September 2013, government debt matured worth 57 trillion IDR of 636.68 trillion IDR.
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