REPUBLIKA.CO.ID, JAKARTA -- A leading Indonesian economist said U.S. JP Morgan Chase Bank has unnecessarily committed blunder in downgrading the quality of Indonesian bonds.  "I think JP Morgan has committed blunder, an unnecessary mistake, A Tony Prasetiantono from the state run Gajah Mada University said here on Monday. 

Tony was commenting on the result of the latest research by JP Morgan reportedly improving rating of Indonesian bond assets to"neutral" after earlier downgrading the rating to "underweight" in November 2016 as it was considered the volatility risk has disappeared. 

Tony said the result of the research of JP Morgan in November 2016 obviously was not correct by comparing to the rating given to Brazil. The South America's largest economy suffered a contraction of 3.8 percent in economic growth with a state budget deficit of 10 percent of its GDP but its rating was downgraded only by one level to neutral from overweight, while Indonesia was downgraded by two levels from overweight to underweight.

Tony, however, appreciated the correction made by JP Morgan by improving Indonesian rating to "neutral" by doing so putting at stake its credibility and reputation. "Their step (in improving the Indonesian rating again) is right but it showed that they had made a blunder," Tony said. 

Commenting on the decision of the Finance Ministry to break all ties with JP Morgan, Tony said the government should consider a review as random change in policy could hurt the government credibility.

Earlier, Finance Minister Sri Mulyani, when asked to comment on her decision to terminate relations with JP Morgan said partnership with financial agencies should be formed based on good relations and mutual benefit. "However, under the prevailing condition, it would be better if positive psychological form is created and the country's economy would continue to be managed professionally amid the global condition that shows no signs of improvement."

"It does not mean everything is perfect, but we will seek improvement with professionalism, accountability, and transparency and would continue to create relations with mutual respect."

"We would be open to criticism and assessment, as it is important to improve ourselves. However, an agency having big name carries big responsibility to create positive psychology instead of misleading," the minister said referring to the U.S. bank.

She said she hope all government's partners could contribute to maintaining the national economic fundamental through positive and sustainable cooperation. She said the government has paid good attention to the people and views of agencies having high credibility such as in the issue of tax reform. "If we think the state budget as a sources of problem, we are not hesitate to make correction as we believe professional, accountable and credible relations are important," she said.

Robert Pakpahan, the ministry's director-general for budget financing and risk management said the research by JP Morgan cast doubt on the quality of the assets of Indonesian companies.

Robert said the result of the research is "very much questionable based not on accurate and credible evaluation." He said JP Morgan will no longer serve as sales agent for government bonds and as joint lead underwriter for the government global bonds. Its position as perception bank for tax payments will be replaced by other bank, he added. 

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