Indonesia's economy has been given a much needed shot in the arm by the credit rating agency Moody's Investors Service.

Moody's has upgraded the country's outlook from 'stable' to 'positive' following the rescheduling of its $5.4bn (�3.7bn) debts two weeks ago.

The vote of confidence from Moody's should boost international investors' confidence in Indonesia, thereby enabling the country to attract fresh cash.

Money is needed to rebuild Indonesia's economy following the financial and political crisis that shook the country in the wake of the ousting of the dictator Suharto in 1998.

Reduced risks

Indonesia's deal with the Paris Club of official creditors and its return to normal relations with the International Monetary Fund (IMF) have reduced the risks of a future cash crunch, Moody's said.

The Fund has said economic reforms in Indonesia have convinced it to maintain a $5bn lending program.

The other major international credit rating agency Standard & Poor's has put Indonesia on credit watch with a view to upgrade if Indonesia reaches a rescheduling agreement with its private creditors.