Jakarta reforms restoring confidence: IMF<\/p>\n
SINGAPORE (Reuters): Indonesia's economic reforms are a move
\nin the right direction and are restoring market confidence,
\nInternational Monetary Fund (IMF) director Kunio Saito said
\nyesterday.<\/p>\n
He said that in November and December, the reforms the IMF
\ndemanded as conditions for a $43 billion rescue package for
\nIndonesia proved inadequate.<\/p>\n
"In January, more recently, the authorities revamped and
\nstrengthened these measures and the markets are responding and
\nwe're moving in the right direction," Saito told reporters on the
\nsidelines of a trade union conference in Singapore.<\/p>\n
He said the idea of a currency board arrangement to help
\nstabilize Indonesia's rupiah, which has lost as much as 80
\npercent of its value against the dollar since July, was worth
\nlooking into.<\/p>\n
Under such a system, the rupiah would be pegged at fixed rate
\nto dollar and backed 100 percent by dollars equivalent to money
\nin circulation.<\/p>\n
"I think it's an interesting proposal and worth exploring, but
\nit's important to explore all the pros and cons before finalizing
\nthe policy," Saito said.<\/p>\n
The most important thing right now was to stabilize the
\nmarkets. After that the currency board option could be explored,
\nhe said.<\/p>\n
Saito said the Indonesian government had already done a number
\nof important things, like adjusting reform measures.<\/p>\n
This "is showing that the government is fully committed and
\ndetermined to implement all the reform measures. That's very
\nimportant to give assurance to the markets," he said.<\/p>\n
It was also important to ensure Bank Indonesia, Jakarta's
\ncentral bank, had enough reserves and that the international
\ncommunity helped with the IMF rescue package.<\/p>\n
Saito said Indonesia also had to work out some roll-overs and
\nrescheduling of short-term debt with foreign creditors.<\/p>",
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