The rating agency Moody's on Friday cut the sovereign credit rating of Greece to the lowest level, saying the country's default risk was high.

Greek police officers protest in front of the Greek parliament in Athens, Greece on Feb. 28, 2012. Protesters oppose new austerity measures imposed by the Greek government and the troika. [Photo/CFP]

Moody's downgraded Greece long term sovereign credit rating from "Ca" to "C" , the lowest credit rating level on its bond scale, meaning the debt is in default.

The rating decision "was prompted by the recently announced debt exchange proposals for Greece, which imply expected losses to investors in excess of 70 percent, which is consistent with Moody's criteria for a C rating," said a report issued on its website.

"Moody's decision not to assign an outlook to the rating is based on the very high likelihood of a default by the Greek government on its bonds and the fact that C is the lowest rating on Moody's rating scale," according to the rating agency.

In a similar move on Monday, Standard & Poor's cut Greece's "CC" long-term and "C" short-term sovereign credit ratings to "selective default"(SD), after the debt-laden country launched a bond swap plan to ease its debt burden last week.

Greece formally launched the bond swap program a week ago, under which, bondholders are to take losses of 53.5 percent on the nominal value of their Greek bonds, with actual losses put at around 75 percent.

Greece has suffered from debt problems for years. It had been relying on bailout funds from International organizations since May 2010. However, the first round rescue funds were not enough to prevent the country from defaulting, European leaders had agreed to provide a second bailout funds, totaling 130 billion euros.

In order to receive the funds, Greece has to undergo fiscal austerity, which had already faced strong opposition from Greek civilians.

Moody' s said the debt swap will incur "substantial economic losses" on private creditors' holdings of the Greek government debt.