Joint intervention to shore up rupiah temporarily halted<\/p>\n
By Devi M. Asmarani<\/p>\n
KUALA LUMPUR (JP): Indonesian Finance Minister Mar'ie Muhammad
\nsaid here yesterday that joint intervention with Singapore and
\nJapan to prop up the rupiah has been temporarily suspended.<\/p>\n
Speaking at the end of the two-day meeting of the finance
\nministers of the nine-member Association of Southeast Asian
\nNations (ASEAN), Mar'ie said that the joint intervention had
\ntemporarily been stopped.<\/p>\n
\"I think, for the time being, we will not intervene against
\nthe market,\" Mar'ie told journalists following the meeting, which
\nalso had participants from Australia, China, Hong Kong, Japan,
\nSouth Korea and the United States.<\/p>\n
He said in the present situation where the regional market was
\nvery volatile due to the impact of South Korea's monetary
\ndifficulties, the intervention would not be effective.<\/p>\n
Mar'ie said that the joint intervention could be pursued in
\nthe future, especially after the market turmoil in South Korea
\nhad become calmer.<\/p>\n
The Monetary Authority of Singapore and the Bank of Japan have
\nrecently bought rupiah on behalf of the Indonesian central bank,
\nBank Indonesia, to shore up the currency.<\/p>\n
Japanese Vice Finance Minister Eisuke Sakakibara confirmed
\nthat the Bank of Japan had jointly intervened to shore up the
\nrupiah, saying that the practice was the first made outside the
\nGroup of Seven (G-7) developed countries.<\/p>\n
\"When there is an appropriate time, we may intervene again.
\nOur intervention some time ago was successful,\" Sakakibara said.<\/p>\n
In Jakarta, the rupiah fell to a day low of 3,840 against the
\ngreenback yesterday before settling to 3,815\/35 at the close.<\/p>\n
\"The rupiah is not the only currency falling now. So are the
\nMalaysian ringgit and the Thai baht,\" Mar'ie said. \"Even the
\nJapanese yen fell to 128 and the Korean won had long broken the
\npsychological barrier of 1,000 to 1,240,\" he added.<\/p>\n
The minister said that the uncertainty in the regional
\ncurrencies were caused by the uncertainty regarding the IMF
\nbailout program for South Korea.<\/p>\n
Mar'ie also denied that the persistent drop in the rupiah
\nagainst the U.S. dollar was due to conflicting statements made by
\nIndonesian officials about the use of bilateral aid from
\nSingapore.<\/p>\n
The recent meeting between President Soeharto and Singapore
\nPrime Minister Goh Chok Tong had clarified the matter, he said,
\nadding that the government would not use the funds to bail out
\nthe private sector's debts as feared.<\/p>\n
Indonesia received a US$23 billion bailout brokered by the
\nInternational Monetary Fund and more than $15 billion in
\nbilateral aid packages from Japan and several other countries.<\/p>\n
Speaking to Indonesian reporters covering the meeting, Mar'ie
\nagain stressed that the government would never use the IMF-led
\nfinancial aid to bail out ailing Indonesian companies.<\/p>\n
The minister said that the private sector should not rely on
\nthe government in dealing with their mounting offshore loans.<\/p>\n
\"The government shows the way how to cope with their debts.
\nBut private companies should have their own initiatives how to
\nsolve their debt problems,\" he said.<\/p>\n
He said that private companies should talk directly to their
\ncreditors if they wanted their debts to be rolled over.<\/p>\n
The minister promised that the government would help the
\nprivate sector to lobby their lenders to roll over their debts.
\n\"But for sure, the government will not help them with money to
\npay their debts,\" he added.<\/p>\n
Bank Indonesia's managing director Paul Sutopo Tjokronegoro
\nsaid last week that at least 40 percent of private short-term
\nforeign debts due for repayment by March next year might be
\nrolled over.<\/p>\n
He said that the rollover of the private debts followed
\nlobbying by the Indonesian government with Japanese creditors.<\/p>\n
Photo -- Page 10<\/p>\n
ASEAN -- Page 12<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/joint-intervention-to-shore-up-rupiah-temporarily-halted-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }