Fischer sees resumption of RI loans<\/p>\n
TOKYO (Reuters): The International Monetary Fund (IMF) may be
\nable to resume disbursement of funds to aid Indonesia's battered
\neconomy \"reasonably soon\", IMF First Deputy Managing Director
\nStanley Fischer said yesterday.<\/p>\n
Fischer told a symposium in Tokyo that an IMF mission would
\nreturn to Jakarta late this week or next week to resume talks on
\na review of Indonesia's reform program, put on hold by recent
\neconomic and political turmoil.<\/p>\n
\"The situation is especially difficult because of the
\nextraordinary devaluation of the rupiah. But now that the
\npolitical transition has taken place, there is a prospect of a
\nreturn to the IMF program taking place reasonably soon,\" Fischer
\nsaid.<\/p>\n
Indonesia had received only a small slice of a $41.2 billion
\nIMF-led rescue package when desperately needed loans were stalled
\nby the political upheaval which led last month to the resignation
\nof long-time leader Soeharto and his replacement by protege B.J.
\nHabibie as president.<\/p>\n
Weeks of social unrest and political upheaval have dragged the
\ncrippled economy further into depression and the IMF says the
\neconomic forecasts underpinning the reform program will have to
\nbe redone.<\/p>\n
\"There is in place in Indonesia an exceptionally strong
\neconomic team and it is likely that within a few days the IMF
\nmission will return, possibly at the end of this week, early next
\nweek...to Jakarta to resume discussions on the completion of the
\nreview of the program,\" Fischer said.<\/p>\n
\"It would require a renegotiation of the macroeconomic aspects
\nof the program, and that I expect will be done.<\/p>\n
\"And if things go as is reasonable to hope, it should be
\npossible to resume disbursements to Indonesia after the review
\nmission has reported back in a couple of weeks and after the
\npapers are processed and considered by the board of the IMF,\" he
\nadded.<\/p>\n
Fischer added that the IMF had already sent back its monetary
\nmission to Jakarta to assist in the reform of the banking system
\nand in carrying out a monetary system designed to keep inflation
\nfrom getting out of hand and to bring the battered rupiah
\ncurrency back to a \"more reasonable value\".<\/p>\n
Talks among creditor bankers and Indonesian officials on
\nrestructuring the nation's mountainous corporate debt had made
\n\"important progress\", Fischer said.<\/p>\n
Fresh discussions are being held in Frankfurt this week.<\/p>\n
\"There is no question that negotiation has made important
\nprogress in the last few weeks and is on a good track towards an
\nagreement, if not at this meeting, then at the next one,\" Fischer
\nsaid, adding that such a deal would remove one worry from the
\nforeign exchange market and allow the rupiah to strengthen.<\/p>\n
\"As that happens, I believe that confidence in the currency
\nwill begin to come back to Indonesia and that we will then have
\nseen...that the first stage of the reform process, namely, the
\nrestoration of confidence and stability of the currency, will
\ntake place also in Indonesia. As that happens...interest rates
\nwill come down,\" Fischer said.<\/p>",
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