Bosnia's credit rating moved from B 3 with positive prospects to B 2 with stable prospects, the bank said in a statement.
The new credit rating was given by the international company Moody's Investor Service and was the result of a significant economic and institutional progress since the first sovereign credit rating given in March 2004.
Moody's gave a positive assessment of the launching of negotiations on a Stabilisation and Association Agreement with the European Union, defence and police reforms, and the reduced interventionist role of the Office of the High Representative.
Moody's also said the introduction of Value Added Tax at the beginning of the year would ensure additional support to public finance, which is important for the country's progress in the economic policy.
The company also drew attention to negative trends, notably the lack of agreement on constitutional changes and the high current account deficit.