The Indonesian government Friday welcomed an upgrade in its credit ratings by global rating agency Moody's, saying it could help reduce costs in issuing international and domestic bonds.

Moody's has raised Indonesia's credit ratings to B1 from B2 in light of steady improvement in government finances and a major decline in debt ratio.

"The implication is clear. The cost of fund (in issuing bonds) will decline. We hope for that," said state treasury director Mulia Nasution.

Meanwhile, Bank Indonesia deputy government Hartadi Sarwono said the upgraded credit rating would help strengthen the exchange rate of the rupiah.

Moody's praised the government for successful efforts in cutting deficit in the state budget and reducing debt ratio to 50 percent of gross domestic product.

"The structure of the government's debt also makes Indonesia less vulnerable to shocks than some other large borrowers.

"Although somewhat more than half the debt is in foreign currency, the great majority of this debt is owed to official creditors, making the country less subject to adverse changes in external market conditions," Moody's said in a statement.

Source: Xinhua