Economists hail IMF plan to stabilize rupiah<\/p>\n
JAKARTA (JP): Economists and analysts hailed yesterday the
\ngovernment's plan to seek support from the International Monetary
\nFund (IMF), saying it should help tackle the current currency
\ncrisis.<\/p>\n
Economists Christianto Wibisono, I Nyoman Moena and Raden
\nPardede agreed that the decision was the best alternative in view
\nof the crisis.<\/p>\n
"There is no other choice but to seek IMF help. It's a matter
\nof survival," said Christianto, head of the Indonesian Business
\nData Center.<\/p>\n
The crisis, if not dealt with properly and quickly, could lead
\nto political instability, dangerous to the convening of the
\nPeople's Consultative Assembly next March, he said.<\/p>\n
Nevertheless, he continued, he saw no political motive behind
\nthe decision, but a pure "technical" measure to heal the
\ncountry's ailing economy.<\/p>\n
President Soeharto endorsed a decision yesterday to seek
\noutside help, including from the IMF, to restore confidence in
\nthe battered rupiah.<\/p>\n
But no details were given on how much assistance would be
\nsought or in what form.<\/p>\n
But analysts said any package would be far less than the
\nUS$17.2 billion received by Thailand, the first Southeast Asian
\nnation to turn to multilateral agencies after its currency was
\nbrowbeaten.<\/p>\n
Danareksa Sekuritas economist Raden Pardede said the
\ngovernment's newest move would help restore confidence,
\nespecially among local companies which had rushed for U.S.
\ndollars over the past few weeks.<\/p>\n
"The move is good. Otherwise, Indonesia will run into trouble
\nif it does not seek assistance from such an international
\ninstitute," he told The Jakarta Post.<\/p>\n
Both Raden and Christianto predicted that the IMF would impose
\ntough measures on Indonesia like fiscal tightening, including
\nexpenditure cuts and the removal of oil and electricity
\nsubsidies.<\/p>\n
Christianto said it would be rather encouraging for
\nIndonesia's future if the move brought about much-needed
\nstructural reform in the economic front.<\/p>\n
He predicted that the IMF might demand for the elimination of
\nmonopolies and other economic distortions in return for its
\nfinancial help.<\/p>\n
But Nyoman Moena, chairman of the supervisory board of the
\nNational Private Banks Association, said that the IMF would not
\nimpose many conditions on Indonesia, considering that Indonesia's
\neconomy was not as bad as Thailand's.<\/p>\n
"Unlike Thailand, Indonesia is not actually in dire need of
\nsuch help. Therefore, it has some bargaining position not to
\naccept all IMF conditions, if there are any," he said.<\/p>\n
And there would be no reason for the IMF not to help Indonesia
\nconsidering that the Indonesian government had implemented all
\nprudent macroeconomic management as required by IMF.<\/p>\n
"We have had a balanced budget and free foreign exchange
\nregime, managed to achieve low inflation and high growth and met
\nall international obligations on time for 30 years," Moena said.<\/p>\n
Nevertheless, it was Indonesia's right, as an IMF member, to
\nseek its help, and it was IMF's obligation to help Indonesia to
\ndeal with the current problem, he added.<\/p>\n
He said a persistent weakening of the rupiah over the past few
\nweeks was largely attributed to the increasing demand by local
\ncorporations to purchase dollars to refinance their dollar debts.<\/p>\n
The rupiah reached a historic low of 3,850 against the U.S.
\ndollar on Monday, and some analysts forecast it could easily drop
\nto the 4,000 level if the government did nothing to shore it up."
\nsaid a local bank dealer. (aly\/jsk\/rid)<\/p>\n
IMF -- Page 10<\/p>\n
Rupiah -- Page 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economists-hail-imf-plan-to-stabilize-rupiah-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }