Fitch cuts Indonesia credit rating outlook to negative

JAKARTA, March 4 (Reuters) - ‌Fitch Ratings ​on ​Wednesday cut Indonesia's credit rating outlook to negative from stable, citing increasing ‌uncertainty and reduced credibility in policymaking, in ⁠a move that will add to investor concerns about ‌Southeast Asia's largest economy.

Fitch ‌became the second rating agency to revise down Indonesia's sovereign rating outlook this year, after ​Moody's last month cut its outlook due to reduced predictability in policymaking.

Both agencies have ⁠maintained Indonesia at the second-to-lowest investment grade rating, and a ​negative outlook means the agency's next rating action could be a downgrade.

The Moody's ​outlook cut rattled Indonesia's financial ‌markets, and it came soon after index provider MSCI in January had ⁠flagged transparency issues in the stock market that triggered a $120 billion rout.

"The outlook revision reflects increasing ⁠policy uncertainty and erosion of Indonesia's policy mix consistency ​and credibility amid growing centralisation of policymaking authority," Fitch said in a statement.

"This could weaken the medium-term fiscal ‌outlook, undermine investor sentiment, and put pressure on external buffers."

Fitch's decision was ‌widely reported by local media ahead of the ⁠official announcement.

(Reporting by ‌Gayatri Suroyo, Ananda ​Teresia, Stefanno Sulaiman in Jakarta and Rae Wee in Singapore; Editing by Martin ‌Petty)

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