Fitch ups Indonesia to BB

Fitch Ratings said it upgraded the long-term foreign- and local-currency issuer default ratings of the Republic of Indonesia to BB from BB-, along with its country ceiling to BB+ from BB. The agency also affirmed its short-term rating at B.

The outlook is now stable.

The upgrade reflects, in part, the agency's view that Indonesia is following through on earlier policy intentions aimed at implementing a more aggressive structural reform agenda to address the weak investment climate. The government's efforts to tackle corruption, bureaucratic and regulatory hindrances to investments intensified in 2007 and were complemented by key investment legislation and an economic policy package, Fitch said.

Positive economic growth and balance of payments implications had already become evident in 2007, the agency said, enabling Indonesia to enter the current period of tightened global credit conditions and weaker external demand on a firmer footing.

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