IMF approves loan installment for Indonesia<\/p>\n
WASHINGTON (Dow Jones): The International Monetary Fund
\nTuesday approved a US$460 million loan installment for Indonesia.<\/p>\n
In a further vote of confidence in Indonesia's economy, the
\nIMF said in a statement that its directors approved the sixth
\nreview of the IMF's Extended Fund Facility arrangement with
\nJakarta and have given their approval to disburse the next
\ninstallment.<\/p>\n
Stanley Fischer, the IMF's first deputy managing director,
\nsaid in a statement later Tuesday the latest review of the
\nIndonesian economy found \"signals of an incipient recovery in
\nreal output.\"<\/p>\n
Fischer said the IMF's board also welcomed a recent
\nimprovement in market confidence toward Indonesia, the successful
\nconclusion of recent national elections and the continuing
\nimplementation of the economic reform program.<\/p>\n
He said the success of this program so far is evident in the
\nrecent recovery of the Indonesian rupiah and a climb in local
\nequity prices.<\/p>\n
\"The agreed monetary policy stance should permit a further
\ngradual and market-led decline in interest rates given the
\nsizable output gap and the absence of inflation,\" Fischer said.<\/p>\n
\"Exchange rate policy should continue to be implemented
\nflexibly so as to accommodate market pressures. In the near term,
\nfiscal policy should deliver the planned stimulus necessary to
\npromote recovery,\" he said.<\/p>\n
In particular, the government should aim to boost spending on
\nsocial programs to aid Indonesia's poorest, Fischer said.<\/p>\n
\"Directors emphasized that the restoration of strong and
\nsustainable growth requires an acceleration of structural
\nreforms, especially in bank and corporate restructuring,\" he
\nsaid.<\/p>\n
Fischer urged the Indonesian government of President B.J.
\nHabibie to spur the recapitalization and restructuring of state
\nbanks, to accelerate the privatization of banks taken over by the
\nIndonesian Bank Restructuring Agency and to improve bank
\nsupervision.<\/p>\n
Turning to Indonesia's private sector, Fischer said that with
\na new framework in place to work out corporate debts, there
\nremains the challenge to ensure that creditors and debtors
\nactually seize this opportunity to negotiate new debt
\nsettlements.<\/p>\n
He also stressed the need for Indonesia to press ahead with
\nnew bankruptcy procedures to ensure that companies hemorrhaging
\nlosses are forced to close instead of soaking up more debt.<\/p>\n
\"Directors recognized that the economic recovery is still at
\nan early stage, and emphasized the need for continued careful
\nimplementation of agreed macroeconomic and structural policies to
\nensure that recent achievements are preserved and enhanced as the
\npolitical environment changes,\" Fischer concluded.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/imf-approves-loan-installment-for-indonesia-1447893297",
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