Paris Club expects RI to suspend its debt repayments<\/p>\n
PARIS (Agencies): A Paris Club official said yesterday that
\nIndonesia was expected to suspend some debt repayments in August
\nahead of a September agreement on the treatment of its debt.<\/p>\n
Asked to comment on newswire reports that Indonesia had
\ndefaulted on a sovereign debt repayment, the official said: \"It
\nwas expected within the framework of the treatment of their
\nsovereign debt...that the August repayment would be suspended.\"<\/p>\n
\"In September we're going to have an agreement on their debt
\ntreatment,\" the official, who asked not to be identified, said.<\/p>\n
The official did not say how much the suspended repayment was
\nworth and said it would have been due around the beginning of the
\nmonth, but said that the suspension was in line with agreements
\nreached.<\/p>\n
In Jakarta, Coordinating Minister of Economy, Finance and
\nIndustry Ginandjar Kartasasmita said yesterday Indonesia began to
\nreschedule its sovereign debt this week in line with agreements
\nwith its major international lenders,<\/p>\n
Speaking to Dow Jones Newswires, Ginandjar said reports that
\nthe country had missed sovereign debt payments were inaccurate,
\nstressing that the country had simply begun to implement an
\nagreement reached with the International Monetary Fund.<\/p>\n
\"We have already notified the Paris Club (of creditor nations)
\nabout this...we are actually not reneging, just implementing the
\nagreement,\" Ginandjar said.<\/p>\n
\"It's part of the package we have worked out with the IMF of
\nUS$6.2 billion already incorporated in our budget,\" he said.
\n\"It's clear, it's transparent. It's nothing new, it shouldn't
\nshock the markets.\"<\/p>\n
Ginandjar confirmed that Indonesia would continue to pay
\ninterest on its debt, as agreed with its lenders.<\/p>\n
\"We were advised by the IMF that we could already notify (our
\nlenders) and start to reschedule sovereign debt immediately,\"
\nGinandjar said, adding that the government was also advised on
\nthe matter by the Group of Seven leading industrialized nations.<\/p>\n
A German banker involved in lending to the country said
\nyesterday that Indonesia had not indicated to German commercial
\nbankers that it was not able to make payments on outstanding
\nsovereign debt.<\/p>\n
\"We haven't experienced any defaults (on interest payments) on
\nthe sovereign debt we are exposed to, nor have we heard\" of any
\ndefaults at other German banks, the banker said.<\/p>\n
His bank, for one, punctually received payment of interest due
\non Indonesian government debt in July and still expects to
\nreceive the next payment scheduled in December, he explained.<\/p>\n
The official did not say how much the suspended repayment was
\nworth and said it would have been due around the beginning of the
\nmonth, but said that the suspension was in line with agreements
\nreached.<\/p>\n
On July 30, international donor nations pledged $7.9 billion
\nin aid this year to help Indonesia's devastated economy recover.<\/p>\n
Meanwhile, a senior official at rating agency Standard &
\nPoor's said that Indonesia's debt rescheduling talks relate to
\ninter-governmental debt and do not at present include rated bonds
\nissued by the country.<\/p>\n
But the talks to reschedule Indonesia's sovereign debt via the
\nParis Club of official creditors could end up being complex and
\nmay result in some form of debt relief, David Beers, managing
\ndirector for sovereign ratings at S&P said.<\/p>",
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"sponsor": "Okusi Associates",
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