Japan, IMF have secret plan for RI<\/p>\n
TOKYO (Reuters): Japan's Vice Finance Minister for
\nInternational Affairs said yesterday that Japan and the IMF
\nplanned \"some sort of measures\" this week on Indonesia's growing
\nfinancial crisis.<\/p>\n
Eisuke Sakakibara, long dubbed \"Mr Yen\" for his influence on
\ncurrency markets, also said he believed the value of the
\nIndonesian rupiah and South Korean won had sunk too far against
\nthe U.S. dollar.<\/p>\n
His remarks spurred intense interest in Japan, which is
\nIndonesia's biggest creditor and aid donor.<\/p>\n
Japanese banks, themselves in a precarious state, have
\nextended more than one-third of Indonesia's foreign borrowings,
\nwhile the country has topped Japan's official development
\nassistance (ODA) list for the past six years.<\/p>\n
\"This week, in cooperation with the IMF, we will be taking
\nsome sort of measures (on the Indonesian crisis),\" Sakakibara
\ntold NHK television in a program about the Asian financial
\ncrisis.<\/p>\n
Sakakibara gave no details of what the measures would be but
\none of the biggest worries for Japanese banks with exposure in
\nIndonesia is that a $43 billion International Monetary Fund
\n(IMF)-arranged rescue package does not guarantee private-sector
\nloans.<\/p>\n
Japan has contributed five billion dollars to the package.<\/p>\n
The loans are spread among hundreds of Indonesian corporations
\nwhose debt is now regarded as the crux of the country's woes as
\nthe rupiah collapses.<\/p>\n
Indonesia has total external debt of $140 billion, of which
\ncorporate debt is estimated to be at least $66 billion.<\/p>\n
Analysts have slammed the government for not showing enough
\nleadership on the corporate debt mess, which has hobbled firms
\nand threatens to drive the economy into the ground.<\/p>\n
They have said foreign corporate debt was virtually impossible
\nto pay off given the rupiah's plunge.<\/p>\n
The fragile rupiah ended in Jakarta on Friday at 13,000\/13,500
\nafter falling to a day's low of 15,000.<\/p>\n
On Thursday it sank to a historic low of 17,000, down more
\nthan 80 percent since financial turmoil began sweeping southeast
\nAsia in July.<\/p>\n
Sakakibara said he expected the rupiah to recover to 4,000 to
\n5,000 to the U.S. dollar \"at some point\".<\/p>\n
\"I think (the rupiah and the won) will both recover at some
\npoint. The rupiah should come back to around 4,000 to 5,000 at
\nsome point, and once the crisis is over, it will make a more
\nsubstantial recovery.\"<\/p>\n
He did not give a figure for the won.<\/p>\n
Bad debt in South Korea, where Japanese banks do not have as
\nbig a comparative exposure as in Indonesia, is mainly within the
\nbanking system and a small number of huge conglomerates while
\nJakarta's foreign debt burden is spread among many corporations
\nwith widely differing quality.<\/p>\n
Sakakibara said the yen's strengthening against the U.S.
\ndollar in recent days had made it less likely that there would be
\na rash of competitive devaluations by Asian nations of their
\ncurrencies because of the economic crisis.<\/p>\n
\"The yen has regained its strength in recent days, so I don't
\nthink (the yen's movements) would contribute to (a regionwide
\ntendency towards) devaluation,\" Sakakibara said.<\/p>\n
The dollar fell to 125.69 yen late in New York on Friday from
\n127.25 late Thursday, and to 1.7783 marks from 1.8060. It was the
\nlowest level against the yen since the dollar bought 124.86 yen
\non Nov. 21.<\/p>\n
There have been worries that Asian nations, as they seek to
\nfind a way out of their financial woes by boosting exports, may
\ndevalue to make their products cheaper.<\/p>\n
Sakakibara also said it was unlikely China would devalue the
\nyuan.<\/p>\n
Weaknesses -- Page 4<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/japan-imf-have-secret-plan-for-ri-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }