In a report released in November 2016 JP Morgan double downgraded its investment recommendation for Indonesia without elaborating too much on the exact motives behind this drastic move. The Indonesian government was not amused by this news and cut ties with the US bank, claiming that the double downgrade was "misleading" and had a big psychological impact on investors' minds, thereby disturbing Indonesia's financial stability.

Indeed, in November 2016 there was a lot of concern, particularly about emerging markets. Around USD $15 billion of capital was withdrawn from emerging markets' bonds and equities after Donald Trump's victory at the 2016 US presidential election in early November. Moreover, in Indonesia ethnic and religious tensions were rising drastically due to the blasphemy case of Christian, ethnic Chinese Jakarta Governor Ahok.

In its latest research note, JP Morgan stated that Indonesia's economic fundamentals are currently strong, with a high potential GDP growth rate and a low debt to GDP ratio, while authorities are eager to push for economic reform. Improving motorcycle sales in Indonesia were also cited as a motive behind the upgrade.

The new upgrade is welcomed by the Indonesian Government. Indonesian Finance Minister Sri Mulyani Indrawati (briefly) told news reporters that the upgrade "is good".

Read more: Foreign Perceptions of Indonesian Economy, Gov't vs JPMorgan

After the government cut business ties with JP Morgan (implying JP Morgan cannot serve as primary dealer and underwriter for sovereign bonds) there emerged some concern about whether other research providers may face difficulties when releasing reports about the Indonesian economy that are deemed to be negative. Global banks that are primary dealers in Indonesia’s bonds include Standard Chartered Plc, HSBC Holdings Plc, Deutsche Bank AG and Citigroup Inc.