Trade funding scheme for RI not canceled: S'pore<\/p>\n
SINGAPORE (AFP): The Monetary Authority of Singapore (MAS)
\nsaid yesterday the city-state's proposed guarantee scheme to help
\nfinance Indonesian imports would proceed despite reports in
\nJakarta that it had failed.<\/p>\n
\"Singapore has not canceled the plan to set up a multilateral
\ntrade finance guarantee facility for Indonesia,\" a spokesman for
\nthe MAS, Singapore's de facto central bank, said in a statement
\nin reply to media queries.<\/p>\n
Newspaper reports in Jakarta yesterday quoted outgoing
\nMinister of Trade and Industry Tunky Ariwibowo as saying the
\nscheme failed after Singapore was unable to get support from
\nother countries for its proposal. Banking sources said Jakarta
\nwas looking into alternative arrangements.<\/p>\n
\"Singapore is still waiting for a reply from Indonesia's major
\ntrading partners and the multilateral financial institutions on
\nthe proposal,\" the MAS spokesman said.<\/p>\n
\"Singapore understands that uncertainty over Indonesia's
\ncompliance with the IMF measures and the creation of a proposed
\ncurrency board system has held up replies from the countries
\nconcerned,\" the statement added.<\/p>\n
Fresh talks are scheduled between the International Monetary
\nFund (IMF) and Indonesia next week on ways to ease an impasse
\nover the terms of a tough reform program linked to a US$43-
\nbillion bailout for Jakarta.<\/p>\n
Indonesia's plans to impose a currency board system that would
\nset a fixed rate for the rupiah have also been opposed by foreign
\ncreditors.<\/p>\n
The trade guarantee scheme was proposed by Singapore Prime
\nMinister Goh Chok Tong during a visit to Indonesia after foreign
\nbanks refused to honor letters of credit issued by troubled
\nIndonesian banks.<\/p>\n
In a recent media interview, Goh said the scheme would \"insure
\nagainst sovereign risks of Indonesia,\" and this would \"help
\nforeign banks accept letters of credit.\"<\/p>\n
But he noted that the Group of Seven (G-7) developed countries
\nwere planning bilateral arrangements to keep Indonesian trade
\ngoing despite the country's financial crunch.<\/p>\n
\"The schemes can complement one another, but our scheme may
\nbecome unnecessary if the G-7 countries decide that theirs is
\ngood enough. At the moment, I'm waiting for a reply from the
\nleaders of the G-7 countries,\" he said.<\/p>\n
\"These are ideas and proposals which we can do to help the
\ncountries over here to overcome the currency problem and we also,
\nin a sense like the others, tell the countries concerned that
\nthey have to abide by the IMF package which they have signed,\" he
\nsaid.<\/p>\n
In other development, the central Bank Indonesia told five of
\nits correspondent banks overseas that it would deposit $1 billion
\nwith them if they would guarantee letters of credit issued by
\nIndonesian state banks, banking sources said.<\/p>\n
Bank Indonesia approached ABN-Amro of the Netherlands, Bank of
\nAmerica, Standard Chartered of Britain, Bank of Tokyo-Mitsubishi
\nand the Industrial Bank of Japan after the Singapore-backed
\nmultilateral guarantee scheme proposal for Indonesian imports was
\nin a limbo.<\/p>\n
A foreign banker confirmed the negotiations between Bank
\nIndonesia and the five foreign banks but said final terms and
\nconditions had yet to be established. It is not immediately known
\nwhether the central bank had deposited the money with the five
\nbanks.<\/p>",
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