Indonesia’s stocks and currency skidded on Friday after Moody’s lowered the country’s credit rating outlook, the latest jolt for Southeast Asia’s largest economy, wiping about $120 billion off its equity market in a turbulent start to the year.

International investors have reacted nervously to President Prabowo Subianto’s attempt to ramp up growth to 8%, as concerns over fiscal health and central bank independence cool sentiment on Indonesia.

The Jakarta Composite Index (.JKSE) fell 2.5% and the rupiah fell 0.37% to 16,888 per dollar, its lowest since January 22 and down 1% for the year.
Stocks have fallen 5% for the week so far, after last week’s decline of 6.9%.

State-owned Telkom, Pertamina, MIND ID, and the four banks were also affected by the outlook lowering.
Finance Minister Purbaya Yudhi Sadewa brushed off the concerns on Friday, saying Indonesian economic fundamentals were strong, with economic growth accelerating and the fiscal deficit, though swelling, under control.

“There’s no strong reason to downgrade,” Purbaya told reporters, adding that fiscal policy was driving growth. “On the flip side, we should slowly see prospects for an upgrade. Maybe by year-end, when our economic growth is 6% or more.”

Prabowo’s year-old sovereign wealth fund Danantara Indonesia, his main vehicle to push growth, said Moody’s outlook cut “a constructive reminder to strengthen our instutitional foundations”.