Moody's ups Indonesia

Moody's Investors Service said it upgraded Indonesia's ratings to reflect the country's track record of fiscal prudence and improvements in its external position, as well as ongoing structural reforms and sound policy management.

The government's foreign- and local-currency bond ratings were upgraded by one notch to Ba3 from B1. Its foreign-currency bond ceiling was upgraded to Ba2 from Ba3 and its country ceiling for foreign-currency bank deposits was upgraded to B1 from B2. Both the country ceiling for local-currency bonds and the country ceiling for local-currency bank deposits were not on review for upgrade and remain at Baa2.

The outlook is stable.

Along with prolonged fiscal restraint and recurrent under-execution of regional and local level spending targets, exchange-rate appreciation also has assisted in reducing the government debt ratio from a high of 100% of GDP in 2000 to an expected 34% in 2008, Moody's said.

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