Moody's raised the Portuguese government's bond rating by one degree on Friday evening, offering the country a glimmer of hope of recovery from its sovereign debt crisis.

The New-York-based agency said the country had a stable outlook, despite ongoing troubles within one of its major banking groups.

It cited the Portuguese government's "comfortable liquidity position, with regained access to the public debt markets and sizeable cash buffers" as a factor in boosting Portugal's credit rating.

"This should support a gradual reduction in the very high public debt burden in the coming years," Moody's said in a statement.

"The first driver behind the upgrade is Moody's view of the government's strong commitment to fiscal consolidation," it added.

Austerity measures blocked

The agency - which last boosted Portugal's rating in May - added that the upgrade came in spite of repeated setbacks "stemming from the adverse rulings of the country's constitutional court."

In May, the court rejected austerity measures included in Lisbon's 2014 budget as part of the center-right government's ongoing effort to balance the books. The Portuguese government has said it aims to reduce its deficit to four percent of gross domestic product.

Portugal exited a three-year international bailout program in May, after receiving 78 billion euros ($106 billion) from the European Union and the International Monetary Fund in exchange for a series of stringent reforms.

While the upgrade - from the technical rating of Ba1 to Moody's highest "non-prime" rating of Ba2 - may be promising, it only represents a partial recovery of Portugal's credit status. The Ba2 rating means that Moody's still considers Portuguese government bonds "to have speculative elements and a significant credit risk."

Moody's said it did not believe uncertainties surrounding Portugal's Banco Espirito Santo would have a material impact on the government's balance sheet. The bank has been hit by a suspicion that its main holding company has concealed a hole in its accounts.

rc/jm (AFP, Reuters)