Indonesia’s Finance Minister Purbaya Yudhi Sadewa has pushed back against allegations that the country’s AAA credit rating is inflated, as the nation launches a US$1 billion Panda Bond offering in China.
The issuance, which began on Thursday, marks a significant step in Jakarta’s strategy to diversify its funding sources and deepen ties with Chinese capital markets.
The controversy centers on the AAA rating with a stable outlook awarded by China Lianhe Rating Co., Ltd. Critics have questioned the validity of the top-tier grade, prompting Purbaya to publicly defend the assessment.
The minister’s comments aim to reassure potential investors and maintain confidence in the sovereign debt instrument, which is denominated in Rupiah but traded in the Chinese interbank market.
This issuance occurs against a backdrop of tightening regulatory standards in China.
Beijing regulators recently mandated that rating agencies align their assessments with global standards, a rule set to take full effect by August 1.