Soeharto urges IMF to help stabilize rupiah<\/p>\n
JAKARTA (JP): President Soeharto yesterday called on the
\nInternational Monetary Fund (IMF), which has organized
\nIndonesia's US$43 billion rescue package, to do more to help
\nstabilize the rupiah which he says is key to solving the current
\neconomic crisis.<\/p>\n
Soeharto also raised publicly for the first time the question
\nof adopting a Currency Board System (CBS), in which the rupiah
\nwould be set at a fixed foreign exchange rate. The proposal has
\nsparked heated debate among the country's economists and business
\nleaders.<\/p>\n
"I'm carefully and cautiously contemplating the possible
\nadoption of a Currency Board System," he said in his during his
\naccountability speech delivered to the General Session of the
\nPeople's Consultative Assembly yesterday.<\/p>\n
Soeharto has retained American economic professor Steve Hanke
\nto investigate the feasibility of a CBS in Indonesia. The system
\nis in use in Hong Kong, Bulgaria and Argentina.<\/p>\n
Officials have hinted that the rupiah could be set at Rp 5,000
\nto the American dollar. To do this, the entire money supply must
\nbe matched by dollar reserves. If successful, the system will
\nstabilize the rupiah exchange rate.<\/p>\n
However, skeptics say that with public confidence in the
\nrupiah low, current foreign exchange reserves would be
\ninsufficient to support the fixed exchange rate in the face of
\nexpected massive demand for dollars.<\/p>\n
The IMF and world leaders have cautioned Indonesia against
\nadopting a CBS at the present time.<\/p>\n
"I shall not hesitate to do whatever is needed to overcome the
\nsituation in order to alleviate the increasingly heavy burden of
\npeople's lives," Soeharto said.<\/p>\n
While vowing to pursue the sweeping economic reforms promised
\nto the IMF in return for massive loans, Soeharto said there were
\nno signs of improvement on the currency front.<\/p>\n
"I do not see any improvement within the short period of
\ntime," he said.<\/p>\n
"This is the reason why I have asked the IMF and other heads
\nof government to assist us find a more appropriate alternative.<\/p>\n
"I refer to the more appropriate course of action as IMF-
\nPlus."<\/p>\n
Soeharto said he had been following the public debate on the
\nCBS with interest, describing the process as positive and
\nreflecting democracy at work.<\/p>\n
However, differences of opinion should not be exaggerated and
\nused to sow confusion among the public, he said. "More than ever,
\nwe must strive for unity to safely weather the current storm."
\n(emb)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/soeharto-urges-imf-to-help-stabilize-rupiah-1447893297",
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