Fitch Ratings cut Indonesia's credit outlook to negative from stable, citing increasing policy uncertainty under President Prabowo Subianto's administration. The rating agency maintained the country's investment-grade BBB rating but warned of erosion in policy mix consistency and credibility. This follows Moody's similar move in February, further damaging investor confidence in the Southeast Asian nation.

The rupiah held steady despite falling to a near-record low, prompting central bank intervention. Indonesia's 10-year government bond yields climbed to their highest since July 2025, while dollar bonds underperforming emerging-market peers. The nation's benchmark stock index ranks among the worst performers globally this year, with the rupiah the weakest currency in Asia.

Prabowo's administration faces continued challenges after the departure of respected finance minister Sri Mulyani Indrawati. Fitch expects the government to maintain its 3% GDP deficit limit but warns that ambitious growth targets and social spending could test fiscal discipline. The agency identified potential triggers for further downgrade including rising public debt and weakening foreign exchange reserves.