Economy shows encouraging progress: IMF<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The International Monetary Fund (IMF) gave a positive report on
\nthe Indonesian economy on Monday, saying that macro economic
\nindicators in the first few months of the year were encouraging.<\/p>\n
IMF senior advisor for Asia Pacific Daniel Citrin urged the
\ngovernment to stick to the agreed reform program to maintain the
\ncurrent positive sentiment in the economy.<\/p>\n
\"There's been encouraging progress in the first months of the
\nyear. Under the program, the market sentiment has improved, the
\nrupiah has started to strengthen, the (Bank Indonesia) rates are
\nstarting to come down.<\/p>\n
\"... But we have to make sure of continued forward momentum
\nunder the program,\" Citrin told reporters.<\/p>\n
Citrin spearheads an IMF delegation to the country for a
\nregular review on a set of economic reform programs called the
\nletter of intent (LoI).<\/p>\n
The LoI contains a set of targets by which the IMF measures
\nIndonesia's progress in implementing economic reform. Failures on
\nbehalf of the government to meet the targets would lead to a halt
\nin the IMF's lending program.<\/p>\n
The IMF is sponsoring the program under a three-year US$5
\nbillion loan package.<\/p>\n
Citrin's statement shows another vote of confidence in the
\ncountry's commitment to economic reform.<\/p>\n
This follows IMF approval of a $347 million loan tranche for
\nthe country last month and willingness to waive several of the
\nconditions under the three-year loan program to give Indonesia
\nmore time to carry out needed reforms.<\/p>\n
Since the start of the year, Indonesia has managed to make
\nsignificant progress in several of its key programs, which has
\nbeen the cause of the revival of needed foreign confidence.<\/p>\n
Progress in question includes, among other things, the sale of
\nassets held by the Indonesian Bank Restructuring Agency (IBRA)
\nand the approval by the House of Representatives of the
\ngovernment's privatization program for 2002.<\/p>\n
Progress in the asset sale program includes the sale of
\ngovernment shares in Bank Central Asia (BCA), and the launch of
\nthe Bank Niaga divestment plan.<\/p>\n
The positive development had lifted sentiment in the
\nIndonesian market, both currency and stocks, to new heights.<\/p>\n
The rupiah has appreciated by more than 10 percent of its
\nvalue since the beginning of this year, while the Jakarta Stock
\nExchange Composite Index has jumped almost 40 percent. It is
\nconsidered as one of the most best performing markets in the
\nregion.<\/p>\n
Also helping the rupiah's upward movement was the Paris Club
\nof creditor nations agreeing last April to reschedule Indonesia's
\ndebt repayments totaling $5.4 billion.<\/p>\n
The benchmark interest rate on Bank Indonesia one-month SBI
\npromissory notes has also been declining since the beginning of
\nthe year. The rate is now hovering at 16.20 percent compared to
\naround 18 percent late last year.<\/p>\n
Bank Indonesia has said that there is more room for a further
\ncut in interest rates as inflationary pressures are easing.<\/p>",
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