SINGAPORE (Standard & Poor’s) Dec. 1, 2015–Standard & Poor’s Ratings Services
said today that its ratings on the Republic of Indonesia (BB+/Positive/B;
axBBB+/axA-2) are unaffected by the US$10 billion upsizing of its US$30
billion medium-term note program. Indonesia plans to use the larger program
for the government’s general budgetary purposes including, but not limited to,
the refinancing, repurchase or retirement of indebtedness. The ratings on
Indonesia balance the country’s low per capita income and developing policy
and institutional settings against the improved credibility of its monetary
policy, buoyant economic growth, and sound public finances.

The positive outlook indicates the possibility that we could raise our ratings
on Indonesia over the next 12 months if the government achieves its stated
objective of improving the quality of expenditure. This would include allowing
fuel pump prices to adjust more freely and efficiently allocating its public
investment budget.

We could revise the outlook to stable if the government’s reform ambitions
wane or macroeconomic imbalances rise.

We have determined, based solely on the developments described herein, that no
rating actions are currently warranted. Only a rating committee may determine
a rating action and, as these developments were not viewed as material to the
ratings, neither they nor this report were reviewed by a rating committee.

Primary Credit Analyst: Kyran A Curry, Singapore (65) 6239-6342;
kyran.curry
Secondary Contact: KimEng Tan, Singapore (65) 6239-6350;
kimeng.tan

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