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The Impact of Indonesia Sovereign Credit Rating Upgrades and Investment Grade Status on the Sovereign Spread Changes

Indonesian Capital Market Review

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Title The Impact of Indonesia Sovereign Credit Rating Upgrades and Investment Grade Status on the Sovereign Spread Changes
 
Creator Dwi Anggi Novianti; Fiscal Policy Office, Ministry of Finance of the Republic of Indonesia
Dwi Nastiti Danarsari; Department of Management, Faculty of Economics and Business, Universitas Indonesia
 
Description Getting sovereign credit rating upgrades and achieving investment grade status are main goals for countries in order to gain lower yield spread and cost of borrowing. By using ordinary least square method, this research is aimed to analyze the impact of Indonesia sovereign credit rating up-grade and investment grade status on sovereign spread changes. The result shows that the sovereign credit rating upgrades within speculative grade category and investment grade status for Indonesia do not significantly impact sovereign spread reduction. On the other hand, the global condition, especially global risk appetite, has significant impact to Indonesia sovereign yield spread. The research also indicates that Indonesia macroeconomic fundamentals do not significantly explain the movement of sovereign yield spread. Keywords: Yield spread, sovereign credit rating, investment grade, Indonesia
 
Publisher Management Research Center, Department of Management, Faculty of Economics and Business, U
 
Contributor —
 
Date 2013-01-01
 
Type Peer-reviewed Article
 
Format application/mbox
 
Identifier http://journal.ui.ac.id/index.php/icmr/article/view/1581
 
Source Indonesian Capital Market Review; Vol 5, No 1 (2013): January 2013
 
Language en