Fitch gives Indonesia bonds BBB-

Fitch Ratings said it assigned Indonesia's forthcoming U.S. dollar-denominated global bonds due 2024 and 2044 an expected rating of BBB-(EXP).

The expected rating is in line with Indonesia's long-term foreign-currency issuer default rating of BBB- with a stable outlook. The sovereign's long-term local-currency issuer default rating is also BBB- with a stable outlook.

Fitch said that among other factors, Indonesia's BBB- issuer default ratings reflect the following: Indonesia's sovereign credit profile benefits from stronger and less volatile economic growth than its peers; and the fiscal deficit has widened but remains under control - helped by adherence to prudent fiscal rules - and contributes to favorable debt levels, which are low compared with peers.

The ratings also reflect a deterioration of the current account balance in recent years makes Indonesia vulnerable to international investor sentiment and sudden capital outflows, the agency said. So far the authorities have managed to mitigate the negative impact on external balances from international investors' expectations of the U.S. central bank's unwinding of its quantitative easing program. In particular, Bank Indonesia helped to preserve foreign reserves by allowing the exchange rate to depreciate and raising its policy rates.

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