IMF approves release of latest tranche of aid package<\/p>\n
WASHINGTON (Dow Jones): The International Monetary Fund (IMF)
\non Tuesday approved the extension of a US$957 million credit to
\nIndonesia under the $43 billion economic rescue package it
\nassembled in November 1997.<\/p>\n
This installment comes hot on the heels of a Nov. 6
\ndisbursement of $960 million to Indonesia by the IMF, a payment
\nthat had been delayed by around one week from the scheduled
\nrelease date by \"technical\" factors.<\/p>\n
It marks the last monthly release of the fund's overall $11.3
\nbillion standby loan facility for Indonesia, which anchors the
\npackage of funds to be provided by multilateral and bilateral
\nlenders to assist Indonesia in recovering from currency weakness
\nthat wrecked its economy in 1997.<\/p>\n
Next year, the IMF will conduct reviews every two months for
\nthe first six months of the year, after which it's set to move to
\nits usual quarterly examinations.<\/p>\n
Alassane Ouattara, deputy managing director at the IMF, said
\nin a statement the decision to provide another tranche of funds
\nunder the IMF's Extended Fund Facility follows a third IMF review
\nof the state of Indonesian economy and government policies.<\/p>\n
\"The Indonesian economy has remained on the stabilization path
\nunder the most difficult circumstances,\" Ouattara said.<\/p>\n
\"Continued policy implementation, despite an environment of
\npolitical uncertainty, has helped improve market sentiment and
\nthe rupiah has strengthened considerably.\"<\/p>\n
Meanwhile, Indonesian Coordinating Minister for Economy,
\nFinance and Industry Ginandjar Kartasasmita said in Hanoi on
\nWednesday that the release of IMF loans should help to lift the
\nrupiah.<\/p>\n
\"I think it should strengthen the rupiah. At least it will not
\nweaken it,\" Ginandjar told Dow Jones Newswires on the sidelines
\nof the Association of Southeast Asian Nations summit here.<\/p>\n
The U.S. dollar was trading at 7,840 rupiah Wednesday morning
\nin Asia, up from 7,605 late Tuesday.<\/p>\n
The IMF official noted signs of growing business confidence,
\nwhile inflationary pressures appear to be easing, and \"marked
\nprogress has been made is stabilizing the food situation.\"<\/p>\n
There have been incidents of Indonesians rioting as product
\nprices soared across the country, adding to the public pressure
\nalready building around the administration of President B.J.
\nHabibie.<\/p>\n
Ouattara said that while there appears to be \"scope for
\nprogressively lowering interest rates further,\" the government
\nneeds to remain vigilant \"and proceed cautiously.\"<\/p>\n
Ouattara said the greatest economic challenges now confronting
\nthe Habibie government include the reform of Indonesia's
\nfractured banking system and debt-laden corporate sector.<\/p>\n
He stressed that Indonesia's Bank Restructuring Agency must be
\npermitted to operate independently while the central government
\nshould focus its efforts on accelerating the recapitalization of
\nstricken banks.<\/p>\n
\"The government must expedite regulatory approvals for
\nrestructuring and take further steps to strengthen the capacity
\nof the judiciary to implement the bankruptcy law,\" Ouattara said
\nof corporate reform in Indonesia.<\/p>\n
Since the economic crisis in Indonesia surfaced last year, the
\nIMF has promised around $11.70 billion in loans to help the
\nwounded Asian tiger, as long as the government sticks to a rigid
\nand demanding program of economic reforms.<\/p>\n
This latest credit brings to just over $9 billion the amount
\npaid out by the IMF to Indonesia under the November 1997 rescue
\nagreement.<\/p>\n
Rupiah -- Page 9<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/imf-approves-release-of-latest-tranche-of-aid-package-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }