Global rating agency Standard & Poor's (S&P) has maintained its outlook on Indonesia' debt rating as stable, thanks partly to a declining level of debt and improvements in monetary policy management.

The agency affirmed Monday the country's foreign currency debt rating BB-, which is still third level below investment grade.

A stable rating outlook means the agency will be more inclined to retain or even raise its rating for Southeast Asia's largest economy.

A rating upgrade would mean lower borrowing costs for the government and the private sector.

Central bank governor Boediono welcomed Friday the agency's move, especially as the world is being hit by a devastating financial crisis which has now raised the prospect of a global economic recession.

"Bank Indonesia sees this as a positive news in particular amid the ongoing turmoil in the global financial system, which has caused international rating agencies to downgrade ratings of both corporations and sovereigns," Boediono said in a statement.

He said that the affirmation of the rating was down to S&P's favorable opinion on the declining debt level and improvement in monetary policies, in particular those in relation to the country's flexible foreign exchange regime.

The flexible forex regime allows the central bank to maintain enough liquidity to cushion external shocks.

The rupiah gained after the agency's announcement.

The rupiah climbed 0.3 percent to 10,900 per dollar as of 5 p.m. in Jakarta, from 10,938 Thursday, according to data compiled by Bloomberg. It fell as low as 11,225 Friday.

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