RI reaches agreement with IMF on monthly review<\/p>\n
JAKARTA (JP): The government has reached agreement in
\nprinciple with the International Monetary Fund (IMF) on a new
\nletter of intent which would pave the way for the release of
\nanother US$1 billion in bailout funds, a senior minister said.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita said on Thursday that the contents of the
\nagreement would be announced on Friday.<\/p>\n
The government normally signs a new letter of intent with the
\nIMF after every program review.<\/p>\n
IMF Asia-Pacific Director Hubert Neiss is in town to wind up
\nthe program review for November.<\/p>\n
Neiss told reporters separately on Thursday that Bank
\nIndonesia's foreign exchange monitoring plan could be realized
\nnext month.<\/p>\n
Ginandjar said the IMF's monthly review of its assistance
\nprogram was the last one. In the next six months, the Fund would
\nconduct reviews every two months, quarterly thereafter.<\/p>\n
At the beginning of the program, the IMF carried out reviews
\non a quarterly basis. The Fund began conducting monthly reviews
\nin May following the downfall of former President Soeharto.<\/p>\n
Finding an effective way to monitor its Indonesia program had
\nbeen a key concern of the IMF, even before the exit of Soeharto.
\nThe fund was repeatedly frustrated by Soeharto's breaching of
\nprogram commitments while he was in office.<\/p>\n
The IMF, which is organizing a multi-billion dollar bailout
\nmoney for Indonesia, has so far disbursed $7 billion (including
\n$1 billion released this week) out of its commitment to provide a
\ntotal of $10 billion.<\/p>\n
Ginandjar said discussions with the IMF focused on bank and
\ncorporate restructuring, easing monetary policy and controlling
\ninflation. \"The implementation of all policies announced before
\nthis has been reviewed. On the macroeconomic front, efforts were
\ndiscussed to expedite interest rates cuts,\"<\/p>\n
Bank Indonesia Governor Sjahril Sabirin said separately that
\nbenchmark interest rates of its one-month promissory notes (SBIs)
\nwould drop to 40 percent in the coming weeks provided that the
\nrupiah continues to improve and inflation is under control.<\/p>\n
Earlier this week, the governor said interest rates could
\nreach the 40 percent level by year-end.<\/p>\n
Interest rates on one-month SBIs fell to 51.16 percent at this
\nweek's auction from 53.66 percent last week and over 70 percent
\nin September.<\/p>\n
The rupiah, meanwhile, strengthened dramatically over recent
\nweeks. It was traded at 7,800 against the dollar on Thursday.<\/p>\n
At the current level, the rupiah is 35 percent higher than
\nthat in early September but still 68 percent lower than the pre-
\ncrisis level of Rp 2,450 per dollar.<\/p>\n
Meanwhile, the inflation rate has also slowed down. The
\nconsumer price index for the first time fell 0.27 percent in
\nOctober. Nevertheless, the cumulative inflation rate for the
\nfirst 10 months of this year was still high at 79.4 percent.
\n(prb\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-reaches-agreement-with-imf-on-monthly-review-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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