Indonesia to keep monetary policy relatively tight<\/p>\n
TOKYO (Reuters): Bank Indonesia will maintain a relatively
\ntight monetary policy until pressures on the rupiah and inflation
\ndiminish, the central bank's managing director Achjar Iljas said
\nhere yesterday.<\/p>\n
\"I think for the time being and for the immediate future, I
\nthink we will have to maintain a relatively tight monetary
\npolicy,\" Iljas told Reuters Television in an interview.<\/p>\n
\"We will maintain that until we believe pressure on the rupiah
\nand pressure on inflation diminish,\" he added.<\/p>\n
Iljas said a resumption of loans from the International
\nMonetary Fund (IMF) and other international institutions would
\nhelp Indonesia stabilize its economy.<\/p>\n
\"Our first priority is to provide basic necessities for the
\npopulation. With the help of these funds, we can purchase rice
\nand other essential commodities. It will help us mitigate the
\npressure on the majority of the population,\" Iljas said.<\/p>\n
IMF loans to Indonesia were suspended in May amid political
\nand economic turmoil in the country before and after the
\nresignation of former president Soeharto.<\/p>\n
In June, Indonesia signed a fresh accord with the IMF, which
\nsaid an additional $4 billion to $6 billion would be needed on
\ntop of a $41.2 billion rescue package already in place.<\/p>\n
IMF Asia-Pacific Director Hubert Neiss said in a statement
\nreleased in Jakarta on Saturday that the IMF executive board
\nwould meet on Wednesday for a review of Indonesia's economic
\nprogress which is expected to pave the way for a resumption of
\nthe loan.<\/p>\n
As for the task of the central bank, Iljas said the bank will
\ntry hard to control inflation and also the pressure upon the
\nrupiah.<\/p>\n
Iljas also said the agreement reached between the Indonesian
\ndebt negotiation team and creditor banks last month on a program
\nto solve the country's private-sector debt problems and better
\nweather conditions for rice production will help ease pressure on
\nthe economy and the rupiah.<\/p>\n
Asked whether the central bank has a particular level in mind
\nabout the rupiah, Iljas said, \"We believe that in the coming
\nmonths the rupiah will strengthen, but it is of course very
\ndifficult to predict to what level. We hope it will appreciate
\nsignificantly from the present level.\"<\/p>\n
Iljas said the Indonesian Debt Restructuring Agency (INDRA)
\nprogram and other existing programs will help solve the problems
\nof Indonesian firms' non-performing loans.<\/p>\n
The agreement to create INDRA was reached between the
\nIndonesian debt negotiators and creditor banks in Frankfurt last
\nmonth.<\/p>\n
INDRA, fully backed by the Indonesian government and
\nadministered by Bank Indonesia, provides exchange risk protection
\nand assurance as to the availability of foreign exchange to
\nprivate debtors that agree with their creditors to restructure
\ntheir external debt.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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