IMF team to review reform program next week<\/p>\n
JAKARTA (JP): The International Monetary Fund (IMF) review
\nteam will resume talks with the government next week over the
\ncountry's economic reform program, said Coordinating Minister for
\nthe Economy, Finance and Industry Kwik Kian Gie.<\/p>\n
He said the discussion with the IMF team would focus on new
\neconomic measures needed by the country to resolve its current
\neconomic crisis.<\/p>\n
\"It will be a regular meeting ... We'll discuss new programs
\nfor the future,\" Kwik told reporters on the sidelines of a
\nseminar.<\/p>\n
He said the IMF team, which will be in Jakarta from June 12 to
\nJune 22, would not review the performance of the government in
\nimplementing the ongoing economic programs as the deadline for
\nthe implementation of most of the key economic measures fell at
\nthe end of this month.<\/p>\n
The IMF has recently disbursed a US$372 million loan to the
\ncountry after the fund approved the government's new letter of
\nintent, which contains a set of key economic measures mostly to
\nbe completed by the end of June.<\/p>\n
This was the second disbursement out of the $5 billion loan
\npromised by the fund in January to help finance the country's
\neconomic reform program.<\/p>\n
The loan was supposed to be disbursed in April, but was
\ndelayed due to the slow progress of the government in
\nimplementing key economic measures.<\/p>\n
IMF Jakarta representative John Dodsworth had reportedly
\ncriticized the government earlier this week for its inconsistency
\nin implementing key reform programs.<\/p>\n
But Kwik said the accusation made by Dodsworth was
\n\"confusing\".<\/p>\n
\"I don't understand what he means by inconsistency. He talks
\njust like other Indonesian analysts. If there are inconsistencies
\nin the programs, he should specify which ones and in what case,\"
\nhe said in response to questions from journalists.<\/p>\n
Kwik also attacked former IMF Asia Pacific director Hubert
\nNeiss' recent comments in the foreign media that Indonesia might
\nsuffer a second round of the economic crisis if the rupiah
\ntumbles to between Rp 9,000 to Rp 10,000 to the U.S. dollar.<\/p>\n
The rupiah has been under pressure over the past month,
\nparticularly due to domestic political uncertainty and social
\nunrest.<\/p>\n
The rupiah closed at Rp 8,605 to the U.S. dollar on Friday,
\nwhich is much weaker than the government's target of Rp 7,000 to
\nthe dollar for this year.<\/p>\n
Kwik said the volatility and weakening of the rupiah was also
\na consequence of when the country adopted a free-floating
\nexchange rate system in August 1997, allowing the exchange rate
\nof the rupiah to be decided by market mechanisms.<\/p>\n
\"Neiss' comments could be true or false ...,\" he said. But he
\nadded that Neiss should have realized that the fluctuation in the
\nexchange rate of the rupiah was a consequence of the free-
\nfloating system, which was strongly supported by Neiss when he
\nwas still at the IMF.<\/p>\n
\"So I can't understand why he should say such things after
\nhe's now at the Deutsche Bank,\" Kwik said.<\/p>\n
Asked to comment on the plans by the central bank to continue
\nraising the interest rate of its SBI promissory notes if the
\nrupiah continued to weaken, Kwik said: \"It's the policy of Bank
\nIndonesia. The government will not intervene because Bank
\nIndonesia is an independent central bank.\"<\/p>\n
He also said Bank Indonesia had to raise the interest rates
\nbecause interest rates overseas had also increased.<\/p>\n
\"If Bank Indonesia didn't increase the interest rate, people
\nwould park their money overseas,\" he said.<\/p>\n
The interest rate of one-month SBI notes increased to 11.13
\npercent on Wednesday compared to 11.07 percent the previous week.<\/p>\n
An increase in the domestic interest rate would create more of
\na burden for the government as it had issued a massive amount of
\nbonds to help finance the recapitalization of the country's
\nbanks. A large part of the bonds carry a variable interest
\nrate.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/imf-team-to-review-reform-program-next-week-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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