New LoI hailed by economists, analysts<\/p>\n
JAKARTA (JP): Economists and analysts hailed the new Letter of
\nIntent (LoI) signed on Monday by the Indonesian government for
\nthe International Monetary Fund (IMF), saying the targets
\noutlined in the agreement are rational and attainable.<\/p>\n
\"All economic reform targets stipulated in the Letter of
\nIntent are achievable,\" said economist Pande Raja Silalahi of the
\nCenter for Strategic and International Studies (CSIS).<\/p>\n
\"With the current economic team, plus high expectation and
\noptimism, economic targets mentioned in the Letter of Intent can
\nbe achieved,\" said economist Sri Adiningsih of the Yogyakarta-
\nbased Gadjah Mada University.<\/p>\n
After days of intense discussions, Indonesia agreed on Monday
\nto sign an LoI for the IMF, detailing economic reforms to be
\ncarried out by Indonesia in exchange for financial assistance
\nfrom the agency.<\/p>\n
The new LoI reveals that the IMF is easing some economic
\nreform targets in apparent deference to President Megawati
\nSoekarnoputri's request that donor countries show lenience toward
\nIndonesia.<\/p>\n
According to Pande, the signing of the LoI already constitutes
\na concession being made for Indonesia.<\/p>\n
\"With the signing of the Letter of Intent, we can now knock on
\nthe doors of the IMF, World Bank, Consultative Group on Indonesia
\n(CGI) and Paris Group for financial assistance and debt
\nrescheduling,\" Pande said.<\/p>\n
Adiningsih, however, expressed doubt that Megawati's
\nadministration would implement the agreements seriously.<\/p>\n
\"Indonesia is very good on paper, where in fact the most
\nimportant thing is the implementation of agreements outlined in
\nthe LoI,\" she said.<\/p>\n
\"If the Letter of Intent is implemented to the fullest, I'm
\nsure Indonesia's economy will be on track to face future
\nchallenges,\" Adiningsih added.<\/p>\n
\"We need to prove that we are implementing the economic
\nreforms seriously,\" Pande said.<\/p>\n
Megawati, according to Adiningsih, has several advantages in
\nimplementing the economic reforms, including strong support from
\npoliticians in the House of Representatives (DPR), as well as
\nfrom international lending institutions and foreign governments.<\/p>\n
Market analyst David Chang also welcomed the LoI and said
\nthat, in the long run, the LoI would provide a positive boost to
\nattracting foreign investors who, according to him, look out for
\ndeals in the late third and early fourth quarter of the year.<\/p>\n
\"The targets are more achievable,\" said Chang, who is also
\npresident of PT Vickers Ballas Tamara.<\/p>\n
However, he cautioned that, in the short term, the new LoI
\nwould have little impact on the financial market.<\/p>\n
The rupiah closed trading weaker at Rp 8,740 against the U.S.
\ndollar on Monday, compared to Rp 8,730 at Friday's closing.
\nDealers attributed the drop to continued high corporate dollar
\ndemand for the payment of foreign debts.<\/p>\n
Share prices on the Jakarta Stock Exchange ended mixed on
\nMonday in thin trade, but late buying boosted the JSX Composite
\nIndex. The index ended up 0.088 point at 441.307. (03)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-loi-hailed-by-economists-analysts-1447893297",
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