Govt expects next IMF loan later this month<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The government said Tuesday it expected the International
\nMonetary Fund (IMF) to disburse around US$340 million of its next
\nloan tranche to the country later this month.<\/p>\n
Minister of Finance Boediono said the IMF's board of
\nexecutives in Washington were expected to convene sometime
\nbetween June 21 and June 24 to discuss the disbursement.<\/p>\n
"The (IMF)'s board of executives will convene (sometime
\nbetween) June 21-24 over the next loan tranche to Indonesia, and
\nif approved, in two or three days the funds will be disbursed,"
\nBoediono told reporters on the sidelines of a hearing with the
\nHouse of Representatives Commission IX on financial affairs.<\/p>\n
The IMF's board meeting follows the signing of the latest
\nLetter of Intent (LoI) last week by the government, under which
\nthe government made new economic reform targets.<\/p>\n
The LoI contains a set of targets under which the IMF measures
\nthe country's economic reform progress, with failure to comply
\nleading to a halt in its lending program.<\/p>\n
The IMF is in the process of a three-year US$5 billion loan
\nfor crisis-hit Indonesia, and last week's signing was the sixth
\nLoI. The IMF loan would supplement the country's foreign
\nexchange reserves, but cannot be used for financing the state
\nbudget.<\/p>\n
As reported earlier, the LoI contains new promises to the Fund
\nincluding the latest reports of the country's economic
\nperformance.<\/p>\n
Among other things, the government promised to push ahead with
\nplans to sell a number of banks before the end of this year
\nincluding a majority stake in Bank Danamon next month and in Bank
\nLippo by year-end. The sale of a 30 percent stake in state-owned
\nBank Mandiri would be launched in the third quarter.<\/p>\n
The government is now in the process of selling up to 71
\npercent stake in Bank Niaga.<\/p>\n
On fiscal policy, the government is committed to keeping the
\nstate budget deficit within the target of 2.5 percent of gross
\ndomestic product (GDP) this year, although the deficit in the
\nfirst three months of the year was higher than expected.<\/p>\n
The budget deficit in the first quarter of this year stood at
\nRp 5.6 trillion, or above the target of Rp 2.7 trillion, as
\nrevenues declined due to the massive flooding that took place in
\nJanuary and February.<\/p>\n
As for the monetary policy, the government would maintain a
\ncautious stance in the period ahead to be consistent with its
\nmain objective of bringing inflation down to a single digit
\nlevel.<\/p>\n
Inflation has been manageable over the last three months, a
\ndevelopment that the government hails as encouraging, in line
\nwith the upward trend of the rupiah against the U.S. dollar and a
\nslow growth in base money.<\/p>\n
This has allowed the central bank to gradually lower its
\nbenchmark interest rate from more than 17 percent in January to
\naround 15 percent in recent weeks.<\/p>",
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