It also assigned a CCC long term foreign currency issuer rating to the Republic of Indonesia.

It gave a D-4 rating to the country's short term foreign currency rating and a B rating to its long term local currency.

"The CCC issuer rating has been assigned in light of the recent rescheduling of $4.2 billion in sovereign debt with the Paris Club of bilateral creditors and the increased likelihood of some rescheduling of sovereign commercial debt," it said.

It said the ratings reflected Indonesia's large and growing public debt burden and enormous challenge of implementing economic reform in an environment of social unrest and dramatic political change.

It added that further exchange rate depreciation, which would raise the country's external debt burden in GDP terms, a slippage in reform, the expansion ofsovereign debt rescheduling to include the rated Yankee bond, and further social and political instability could warrant a downgrade of the ratings.