JAKARTA - The Indonesian Inter-Agency Investment Management Agency (BPI Danantara) is also a matter of concern in the latest report by Fitch Ratings which revised the outlook for Indonesia's debt rating from stable to negative.
The rating agency assessed that the establishment of the sovereign wealth fund still leaves a number of uncertainties, especially regarding the investment mandate and the potential impact on the country's fiscal condition.
Responding to this, Coordinating Minister for Economic Affairs Airlangga Hartarto said that Danantara is a relatively new investment institution so it is not yet fully known by global market players.
"Danantara is a new sovereign wealth fund organization. Of course, not everyone knows," Airlangga told the media, Thursday, March 5.
According to him, the institution needs time to build a strong track record in order to increase market confidence.
He assessed that the record from the rating agency was an issue that needed to be considered in the future.
Airlangga added that efforts to strengthen the reputation and introduce Danantara to global investors would be the responsibility of the institution's management.
In its report, Fitch Ratings said the investment fund has the potential to be an instrument to encourage downstream projects and the development of strategic sectors.
However, Fitch also emphasized the importance of clarity of the mandate so as not to create additional fiscal risks outside the government budget.
Despite the downgrade, Fitch maintained Indonesia's debt rating at BBB level, which is still in the investment-grade category.
The institution assessed that Indonesia's macroeconomic stability is still quite well maintained, supported by a relatively moderate government debt ratio and an economic growth outlook that is still considered strong.
Airlangga assessed that this showed that Indonesia's economic fundamentals were still relatively strong. "The important thing is that Indonesia remains investment grade. In the future, of course, what Fitch's warning is, we will learn, it is to remind Indonesia what we must learn in the future," he said.
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