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Indonesia’s sovereign debt rating was raised to investment grade by Fitch Ratings on Thursday, citing the country’s strong and resilient economy.

The rating assessor said it raised Indonesia’s long-term and local currency debt rating to BBB- from BB+, putting the country into investment grade after 14 years. The outlook of both ratings is stable, Fitch said.

“The upgrades reflect the country’s strong and resilient economic growth, low and declining public debt ratios, strengthened external liquidity and a prudent overall macro policy framework,” said Philip McNicholas, director of Fitch’s Asia-Pacific Sovereign Ratings group in a statement sent to the Jakarta Globe.

Indonesia lost its investment grade rating in December 1997, at the onset of the Asian financial crisis, which saw almost all of the country’s banking system collapse. Indonesia spent more than Rp 450 trillion to bail out lenders then.

Fitch Ratings also forecast Indonesia’s $700 billion economy to grow to an average of more than 6.0 percent per year through 2013, despite a less conducive global economic climate.

“Indonesia’s domestically-oriented economy and success in delivering relatively strong economic growth without the creation of external imbalances, or a reliance on short-term external financing suggests economic growth prospects should prove resilient to external shocks, as was the case in 2008,” Fitch said.

“Low public debt and positive real interest rates give the authorities policy flexibility to respond to any slowdown,” the ratings agency said.

Analysts and economists in Jakarta said other ratings agencies such as Moody’s Investors Service and Standard & Poors, which raised the country’s sovereign debt rating to one level below investment early this year, may soon join Fitch in upgrading the country’s rating next year.

Moody’s Investors Service raised the nation’s rating in January to Ba1 while Standard & Poor’s increased Indonesia’s long-term foreign-currency rating one level to BB+ from BB in April, with a positive outlook. The rating is one level below investment grade.

“We welcome this long awaited positive news. Technically, it should open up the restriction on a universe of domestic investments  which foreign funds are allowed to invest,” said Jeffrosenberg Tan, head of research at Sinarmas Sekuritas in Jakarta. 

“The investment grade does not mean a lot nowadays. Our rating should be a lot better than highly indebted developed countries. Judging from the relative strength of our sovereign balance sheet compared to developed counterparts, Indonesia should have been awarded a lot sooner then now,” Jeffrosenberg said.

Fitch also said that a strong foreign exchange reserve by Indonesia has put the country in a strong position to shield it from being hit by the impact of the Eurozone debt crisis.

“The strengthening of external finances through substantial reserve accumulation has insulated domestic economic and financial stability during recent periods of intensified portfolio capital flow volatility,” Fitch said.

Indonesia’s foreign exchange reserve stood at $113.9 billion as of the end of November of this year, compared with $95 billion early this year, according to data from Bank Indonesia.

The rupiah, which has been under selling pressure in recent weeks, traded at 9,135 against the dollar on Thursday, falling 0.5 percent from Wednesday's close at 9,090. Bank Indonesia officials have said that they will continue to intervene in the market to support the rupiah.