Moody's may up Indonesia

Moody's Investors Service said it placed Indonesia's ratings on review for upgrade in light of continuing improvement in key government debt ratios, a strong investment response and a healthier external payments position.

The ratings on review include the B1 foreign- and domestic-currency government bond ratings, the Ba3 foreign-currency bond ceiling and the B2 foreign-currency bank deposit ceiling.

"The strong improvements in the government's debt burden and fiscal flexibility are underpinned by the government's fiscal prudence as well as the ongoing revival of a broad range of non-oil commodity sectors that have boosted revenues," Moody's vice president Aninda Mitra said in a written statement. "Most of Indonesia's government debt ratios are now better than its traditional peer group."

Mitra said more work may be needed on the structural reform front to improve labor regulations, tax administration and legal certainty - to improve longer-term investment prospects.

The review will focus on the country's ability to meet its revised fiscal targets, the levels of and prospects for continued increases in investment and the country's general ability to weather volatility in global capital markets, Mitra said.

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