IMF completes 10th review of RI economy<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
After completing its 10th review of Indonesia's economic reform
\nprogram, the International Monetary Fund (IMF) praised the stable
\nperformance of the country's financial markets despite the recent
\nbombing at a Jakarta hotel.<\/p>\n
\"The foreign exchange, equity, and bond markets have performed
\nwell, despite the recent tragedy at the JW Marriott Hotel in
\nJakarta,\" IMF Asia Pacific senior adviser Daniel Citrin said in a
\nstatement issued on Tuesday.<\/p>\n
The solid performance of the financial markets reflects the
\nresilience of Indonesia's economy, the IMF said, which led to
\noptimism that \"the modest growth of around 4 percent remains
\nachievable this year\".<\/p>\n
The government has targeted 4 percent economic growth in the
\n2003 state budget.<\/p>\n
The rupiah and the stock index, both of which stumbled after
\nthe Marriott bombing last week, have regained their footing. On
\nTuesday, the rupiah closed at Rp 8,535 per US dollar, rallying
\nfor the fourth successive trading day, with Monday's closing at
\n8,540.<\/p>\n
The Aug. 5 attack killed 11 people and injured some 150
\nothers.<\/p>\n
The statement also noted that the country had made progress in
\nreforming various areas of the economy, including the financial
\nsector, public finance and macroeconomics.<\/p>\n
The IMF said this progress would \"help entrench the gains in
\nmacroeconomic stability as well as boost the prospects for growth
\nand employment\".<\/p>\n
The review will be presented to the IMF's board of executives
\nin Washington. If approved by the board, it could lead to the
\ndisbursement of a US$480 million loan tranche.<\/p>\n
That would be one of the fund's remaining two loan
\ndisbursements, after Indonesia decided not to extend the current
\n$5 billion IMF loan program when it expires in December.<\/p>\n
\"The decision not to request a successor financial arrangement
\nreflects the success of the government in improving macroeconomic
\nconditions over the past couple of years,\" the IMF said of the
\ngovernment's decision to enter a post-program monitoring (PPM)
\narrangement with the fund rather than extending the program.<\/p>\n
Under the PPM arrangement, the IMF will still meet twice a
\nyear with the Indonesian government to discuss the economy -- its
\nperformance and policies, the statement said.<\/p>\n
Indonesia requested an IMF bailout program after being hit by
\nthe 1997-1998 economic crisis. In return for the IMF loans, the
\ncountry had to draw up quarterly economic reform targets that
\nwere subject to the approval of the IMF.<\/p>\n
IMF's latest assessment of RI's economy<\/p>\n
1. On macroeconomic performance: Inflation has declined markedly
\nand the government now expects it will be in the range of 5
\npercent to 6 percent by year-end. The 2003 budget is on track and
\nthis will support the steady reduction in public debt ratio.<\/p>\n
2. On financial sector reforms: Development in preparing a
\nfinancial safety net -- including establishing a deposit
\ninsurance facility -- will permit, over time, an unwinding of the
\nblanket guarantee of bank liabilities while ensuring the systemic
\nsafety of the financial system.<\/p>\n
3. On public finance reforms: The ongoing reforms of the tax and
\ncustoms administration are to be broadened. The Ministry of
\nFinance is to be reorganized to provide effective treasury and
\nbudget functions.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/imf-completes-10th-review-of-ri-economy-1447893297",
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"sponsor": "Okusi Associates",
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