IMF likely to resume financial aid to RI soon<\/p>\n
WASHINGTON (Dow Jones): The International Monetary Fund's
\nexecutive board is expected next week to back resumption of
\ncredit outlays to Indonesia, although the initial outlays are
\nlikely to total around $1 billion a month, monetary sources said
\nMonday.<\/p>\n
The officials, speaking to Dow Jones Newswires on condition of
\nanonymity, said there isn't any reason at this time to expect a
\nfurther delay in credit outlays to Indonesia.<\/p>\n
However, one source said that program implementation isn't yet
\nseamless, and if there are signs Indonesia is backpedaling on
\ncommitments to the fund it is likely that the institution's
\nexecutive board would again suspend credit disbursements.<\/p>\n
\"I'd be very surprised if it turns out we don't elect to go
\nahead with a credit outlay next week,\" the source said, when the
\nIMF's 24-member board reviews Indonesia's program on May 4.<\/p>\n
The IMF delayed a $3 billion credit outlay in March over
\nIndonesia's failure to implement key terms of its agreement with
\nthe IMF.<\/p>\n
The suspension caused the Manila-based Asian Development Bank
\nto withhold disbursing its $1.5 billion loan to Indonesia aimed
\nat reforming and strengthening the country's financial and
\nbanking sectors.<\/p>\n
However, an ADB official said in Geneva on Monday that the
\nbank is ready to disburse the first tranche of a $1.5 billion
\nloan to Indonesia, but is waiting for the International Monetary
\nFund to take the lead.<\/p>\n
The ADB is holding its annual meeting in Geneva through this
\nweek. The gathering brings together senior central bank and
\nfinance officials from the ADB's 56 shareholder countries.<\/p>\n
The ADB loan supports the IMF's rescue package for Indonesia,
\nwhich requires sweeping reforms to the country's trade, industry
\nand energy sectors.<\/p>\n
Exactly when the loan's first tranche will be made available --
\nand how much this will be -- remains unclear, but ADB officials
\nbelieve little now stands in the way of the loan finally going
\nthrough.<\/p>\n
An ADB official stressed the loan's first tranche won't be
\ndisbursed until the IMF makes its first payment to Indonesia. But
\nthe bank's board is prepared to meet this week to agree in
\nprinciple to unlock the loan.<\/p>\n
Under a revised program agreement reached earlier this month,
\nIndonesia is subject to monthly performance reviews versus
\nquarterly reviews under the initial IMF program. And while the
\nIMF hasn't announced a new disbursement schedule, it is likely
\nthat the delayed credit, and subsequent tranches, will be split
\ninto thirds.<\/p>\n
Indonesian financial markets were roiled Monday by speculation
\nthat the IMF will continue to hold up disbursements from the
\nexisting $10.1 billion standby credit arrangement when its board
\nreviews the new program terms next week.<\/p>\n
The speculation has focused around the dismantling of
\nIndonesian cartels and monopolies with close ties to the Soeharto
\nfamily, in particular. And while these issues could well remain
\ncontentious, the signals from Washington are that there is
\nforward movement by Indonesia on implementation of badly needed
\neconomic reforms and there isn't yet a reason to hold up outlays
\nfurther.<\/p>\n
Dismantling of monopolies isn't seen as a minor point,
\nhowever. And IMF officials have underlined that Indonesia's
\nmonthly monitoring is deliberately designed to keep pressure on
\nthe government to reform.<\/p>\n
At the same time, the IMF and Indonesia have reached
\nunderstandings at this stage that require some positive response
\nfrom the institution, officials have said. For that reason,
\ncredit is expected to resume.<\/p>\n
\"We're at a point where there are a lot of little things
\nhappening,\" an international monetary source said. \"There's a
\nminor flare-up a day.\"<\/p>\n
Tax -- Page 8<\/p>\n
ADB -- Page 9<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/imf-likely-to-resume-financial-aid-to-ri-soon-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }