Australia is regarded as one of the world’s safest borrowers, after a global ratings agency upgraded the country to the highest possible rating for its overseas borrowings.

Fitch Ratings upgraded Australia’s foreign currency issuer default rating to AAA from AA+, joining Standard & Poor’s and Moody’s in giving Australia the highest possible rating.

The ratings upgrade reflected Australia’s fundamental strengths, ‘‘including its high value-added economy, strong political, civil and social institutions and its flexible policy framework,’’ said Art Woo, a director in Fitch’s Asia Sovereign Ratings group.

Fitch also affirmed Australia’s local currency rating of AAA with a stable outlook, in a statement today.

Fitch said it viewed Australia’s low government debt-to-GDP ratio - 26.3 per cent of GDP in 2010-11 - as one of the standout strengths. In comparison, the median ratio in the AAA rating group was 55.7 per cent.