BI sees stronger rupiah on Paris Club debt restructuring deal<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia said the rupiah would strengthen if
\ncreditor nations under the Paris Club agreed to defer debts of
\nsome US$5.5 billion from Indonesia's state budget until the end
\nof 2003.<\/p>\n
\"Paris Club, further steps in privatization and Bank Niaga,\"
\nsaid Bank Indonesia governor Sjahril Sabirin when asked what
\nwould drive the rupiah higher in the coming days.<\/p>\n
Indonesia will meet next week with its sovereign creditors in
\nthe Paris Club, to seek the rescheduling of $5.5 billion in debts
\nmaturing between April 2002 and December 2003.<\/p>\n
Deferring payment on the debts would lift pressure on the
\nrupiah, which despite recent gains remains vulnerable on high
\ndollar demand to pay off corporate foreign debts.<\/p>\n
The rupiah has advanced recently due in part to news
\nthat some creditors will support Indonesia's request to
\nreschedule the debts during the meeting.<\/p>\n
\"If (Finance minister) Boediono showing optimism is enough to
\nlift the rupiah, it will be even more so if it (a Paris Club
\ndeal) can be realized,\" Sjahril said.<\/p>\n
Another factor behind the rupiah's recent gains is the sale of
\nseveral state assets to foreign firms.<\/p>\n
Further cementing confidence in the currency, the government
\nsaid its privatization program won legislators' approval despite
\ngrowing labor protests.<\/p>\n
Twenty-five state firms, some of which analysts say are likely
\nto attract foreign investors, are scheduled for privatization
\nthis year.<\/p>\n
The privatization program has gained momentum since last
\nyear's sale of an 11.9 percent stake in local phone operator PT
\nTelkom through the stock market to foreign investors.<\/p>\n
Telkom's sale earned the government about $300 million, and
\nenticed wary investors to reconsider buying Indonesian assets.<\/p>\n
The government now plans to sell Bank Niaga in June, hoping to
\ncapitalize on the momentum of last month's sale of Bank Central
\nAsia to a U.S. investment firm.<\/p>\n
Recent sales of state assets also have improved Indonesia's
\nchances of obtaining its next loan tranche worth $400 million
\nfrom the International Monetary Fund.<\/p>\n
The fund's board of executives will meet in mid-April to
\nreview the progress of Indonesia's economic reform, before
\ndeciding whether to approve the disbursement of the loan tranche.<\/p>\n
A visiting member of the board indicated last week a loan
\ndisbursement could be imminent, helping to keep the market upbeat
\non the rupiah.<\/p>\n
The local currency received another boost after Telkom
\nannounced on Wednesday it had sold a 12 percent stake in its
\ncellular unit, PT Telkomsel, to Singapore Telecommunications Ltd.
\nIt said the sale was worth $429 million.<\/p>\n
News of the deal spurred renewed dollar selling on Thursday,
\npushing the rupiah to end trading at 9,675 against the dollar
\nfrom 9,800 in the previous day.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-sees-stronger-rupiah-on-paris-club-debt-restructuring-deal-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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