Bank Indonesia signs $500m standby loan<\/p>\n
JAKARTA (JP): Bank Indonesia signed in Tokyo yesterday a
\nstandby loan agreement worth about US$500 million with a
\nsyndicate of major international banks in order to support the
\nposition of its foreign exchange reserves, a central bank
\nofficial said yesterday.<\/p>\n
Sumitro, Bank Indonesia's vice director for foreign affairs,
\nsaid that the standby loan, with a maturity of eight years,
\ncarried an annual interest rate of 0.625 percent above the London
\nInter-Bank Offered Rate.<\/p>\n
The loan, which will be cashed only when the central bank
\nconsiders it necessary to improve the position of its foreign
\nreserves, carries a commitment fee of 0.135 percent per annum, he
\nsaid.<\/p>\n
\"We have to pay the commitment fee even if the loan is not
\nused,\" he said.<\/p>\n
The loan, one of series of standby loans signed by the central
\nbank since 1984, was arranged by JP Morgan, a financial
\ninstitution of the United States.<\/p>\n
Members of the loan syndicate include the Commerze Bank of
\nGermany, Netwest Bank of Britain and three financial
\ninstitutions: Bank of Tokyo, Industrial Bank of Tokyo and Sakura
\nFinance Asia.<\/p>\n
Sumitro said the latest standby loan was essential to maintain
\nthe position of the central bank's total outstanding standby
\nloans at about US$2 billion.<\/p>\n
\"We had to obtain a new standby loan because about $400
\nmillion of the total outstanding standby loans had already
\nmatured,\" he said at a routine banking workshop with finance
\njournalists.<\/p>\n
The central bank began using a standby loan facility in 1984
\nas a debt instrument to support the country's balance of
\npayments. The loan has been gradually increased to achieve a
\nlevel of $2 billion.<\/p>\n
Sumitro said that, in the central bank's experience,
\nmaintaining the position of the standby loans at the $2 billion-
\nlevel was adequate to safeguard the country's balance of
\npayments.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-indonesia-signs-500m-standby-loan-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}