Thu, 19 Oct 2006
Indonesia free from IMF pressures after paying off its debts

Jakarta (ANTARA News) - House Speaker Agung Laksono said that the House of Representatives (DPR) lauded the government`s step in paying off its debts to the International Monetary Fund (IMF) as it would politically and economically free the country from foreign pressures.

The House Speaker made the remarks at the Parliament building here on Wednesday in response to the fact that the government had paid off its debts amounting to US$3.2 billion to the IMF.

"We welcome the government`s step in paying off its US$3.2 billion debt, which was its second stage debt to the IMF," the House Speaker said.

The debt was paid off earlier than initially scheduled in 2007. "We hope this would reflect a better improvement in the country`s macro-economic developent," he added.

He said that the payment of the debt was very important because it meant that Indonesia no longer had any obligation to the IMF and the Fund could no longer intervene in Indonesian domestic affairs, economically as well as politically.

In connection with the 2007 budget, Agung Laksono said that the DPR could endorse various fiscal policies which would be implemented in 2007, including the one on the macro-economic assumptions, namely economic growth at 6.3 percent, inflation rate at 6.5 percent, rupiah exchange rate at Rp9,300/US$, Indonesian crude price at 63 US dollars per barrel and a monthly average interest rate of Bank Indonesia at 8.5 percent.

Besides, the government and the DPR had also agreed to set a budget deficit at 1.1 percent of the country`s Gross Domestic Product for 2007. The 2007 budget deficit was set 0.9 percent higher than that of this year.

In the face of the 1427 Idul Fitri post-fasting month festivities, the DPR said that demand for essential commdities tended to increase.

In this case, the House hoped that it would not generate the inflation rate.

"DPR has asked the government, particularly the relevant agencies to continue monitoring and stabilizing prices in the market of various basic needs through increasing supplies to the market," Agung said. (*)



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