Citigroup Inc. expects Indonesian corporations to proceed with dollar bond offerings this year, even after Moody's Ratings reduced its outlook on the government's credit rating earlier this month. This outlook cut, a negative signal for sovereign risk, is seen by Citi as unlikely to deter corporate issuers seeking cheaper funding in the global capital markets.

The bank's stance highlights the divergent pressures facing Indonesia: while government borrowing costs may rise due to the rating action, companies are expected to leverage the dollar's relative strength and potentially lower domestic interest rates to access international capital. Dollar bonds remain a key funding tool for Indonesian firms, offering access to deeper investor pools and potentially more favorable terms than local currency debt, despite the broader sovereign headwinds. Citi's forecast underscores the complex calculus for Indonesian issuers navigating both domestic policy shifts and global financial conditions.