Exim Bank's facilities may include crude oil<\/p>\n
TOKYO (Reuters): The Export-Import Bank of Japan said
\nyesterday it was open to negotiating on including crude oil in
\nthe list of items Indonesia is entitled to buy using a recent $1
\nbillion loan from Japan.<\/p>\n
\"The oil and gas sector is not covered in this round of
\nfinancial aid,\" a bank official said.<\/p>\n
\"But if there is a request from Indonesia, we are ready to
\nconsider including it in the list of (raw material) imports for
\nexporters which are covered by the loan,\" the official said.<\/p>\n
The Japanese bank signed an agreement on the five-year loan
\nwith Indonesia's Finance Ministry on Thursday in a bid to improve
\nIndonesia's exports situation.<\/p>\n
Despite the rupiah's depreciation, Indonesian exports have
\nbeen shrinking because exporters are having a hard time importing
\nraw materials and parts for production facilities.<\/p>\n
Amid Indonesia's lack of foreign reserves and the instability
\nof the financial system, foreign suppliers were reluctant to
\naccept letters of credits issued by Indonesian commercial banks,
\na statement by the Export-Import Bank said.<\/p>\n
The $1 billion loan was aimed at boosting the credibility of
\nletters of credit issued by Indonesian banks by injecting funds
\ninto the country's financial sector.<\/p>\n
Exporters of 26 products, such as textiles and electronic
\nappliances, can import raw materials and parts using letters of
\ncredit supported by the Japanese loan.<\/p>\n
Oil products are not included in the list.<\/p>\n
However, the bank official said plastic products are on the
\nlist, which enables petrochemical manufacturers such as PT
\nChandra Asri to take advantage of the loan for feedstock naphtha
\nimports.<\/p>\n
Though a member of the Organization of Petroleum Exporting
\nCountries (OPEC), Indonesia imports as well as exports crude oil
\nand oil products.<\/p>\n
There was talk recently in the oil market that Indonesia's
\nstate oil firm Pertamina was in negotiations with a western oil
\nmajor to buy a very large crude carrier of crude oil, but that
\nnegotiations fell through due to a problem relating to letters of
\ncredit.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/exim-banks-facilities-may-include-crude-oil-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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