Rizal plays down fears over current weakening of rupiah<\/p>\n
JAKARTA (JP): Coordinating Minister for Economic Affairs Rizal
\nRamli said on Tuesday that the current weakening of the rupiah
\nshould not be of a great concern because food supply was more
\nthan sufficient.<\/p>\n
Rizal said that the fall in the exchange rate of the rupiah
\nagainst the U.S. dollar would have a serious impact on the
\noverall economy if there was also a food supply shortage like the
\none which occurred in early 1998 when people had to queue to buy
\nfood.<\/p>\n
"But now the food supply is quite sufficient. There are more
\nthan 2 million tons of rice in Bulog's warehouse," he told
\nreporters following a meeting with government officials.<\/p>\n
Bulog is the State Logistics Agency.<\/p>\n
"I'm not worried as long as the supply of food is enough," he
\nadded.<\/p>\n
He also said that in every economy as in the U.S. or other
\ncountries, the most important economic indicator was not the
\nexchange rate but the unemployment rate.<\/p>\n
Rizal said that the current weakening of the rupiah was
\nlargely due to political factors, not economic factors, as
\ncertain parties were trying to force President Abdurrahman Wahid
\nto step down.<\/p>\n
He said that Bank Indonesia had spent around US$10 million to
\nintervene in the currency market to defend the ailing local
\ncurrency.<\/p>\n
But Rizal said that the plot to force the President to step
\ndown before his term ends would not succeed because Vice
\nPresident Megawati Sukarnoputri had ordered her Indonesian
\nDemocratic Party of Struggle, the largest political party in the
\nparliament, not to try to unseat the President
\nunconstitutionally.<\/p>\n
He added that Speaker of the House of Representatives Akbar
\nTandjung also shared the same view.<\/p>\n
Rizal expressed confidence that the rupiah would strengthen
\nagain after the political pressure subsided due to the lack of
\nsupport for parties seeking to unseat the President.<\/p>\n
The rupiah ended at Rp 9,330 per U.S. dollar late on Tuesday
\ncompared to Rp 9,400 on Monday.<\/p>\n
Dealers said that the local currency regained ground after it
\nfailed to further fall to below the psychologically sensitive
\nlevel of Rp 9,500 during the day.<\/p>\n
Dealers said that the rupiah was supported by Megawati's
\ninstruction to her party members not to join the increasing
\nefforts to unseat the President, and by the report of
\nAbdurrahman's good health after a routine physical checkup.<\/p>\n
The rupiah has been under strong pressure over the past couple
\nof weeks due to a combination of domestic political factors and a
\ndecline in regional currencies particularly the Philippines peso.<\/p>\n
The International Monetary Fund warned the government on
\nMonday of the danger if it failed to lift market sentiment.<\/p>\n
Visiting IMF Asia Pacific director Yusuke Horiguchi said that
\nthe government must continue with its economic reform program
\nincluding accelerating the sale of assets under the Indonesian
\nBank Restructuring Agency (IBRA).<\/p>\n
Rizal said that the government was committed to accelerate the
\nasset sale program.<\/p>\n
He pointed out that the plan to replace IBRA chairman Cacuk
\nSudarijanto was aimed at accelerating the sale of IBRA assets and
\nthe restructuring of the corporate sector.<\/p>\n
Finance Minister Prijadi Praptosuhardjo said earlier on Monday
\nthat Cacuk would be replaced this week.<\/p>\n
Elsewhere, Rizal said that several former bank owners had
\nindicated to him their willingness to surrender additional assets
\nand their personal guarantee to repay their debt to the
\ngovernment.<\/p>\n
Rizal declined to name the bank owners, but promised that when
\nthe time comes he would announce it.<\/p>\n
Several business tycoons had agreed last year to surrender
\nseveral assets to repay their bank debts to the government. But
\nit turned out that the value of the assets they pledged were not
\nsufficient to cover their obligation. The current economic team
\nhas demanded the business tycoons inject additional assets. (rei)<\/p>",
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