Bank Indonesia sets up monetary monitoring team

JAKARTA (JP): Bank Indonesia (BI) has formed a monetary monitoring committee in an effort to implement more of the reforms agreed to with the International Monetary Fund.

The central bank said in a decree, signed Monday but released yesterday, that BI director Miranda Gultom would head the team, which included Sean Nolan of the IMF, Jaime Jaramillo of the U.S. Treasury Department and Ditrich Domanski, a Deutsche Bundesbank expert, as members.

The decree, signed by BI directors Aulia Pohan and Achjar Iljas, stipulates that the committee's main task is to monitor daily monetary developments and provide monetary policy recommendations to the central bank governor.

The government is expected to implement more measures required by the new agreement with the IMF.

Following is a list of reform measures the government is due to announce today. Some of the measures are listed as already done:

* Set minimum capital requirements for banks of Rp 250 billion by the end of 1998, after loan loss provisions.

* Make loan loss provisions fully tax deductible, after tax verification.

* Transfer claims resulting from past liquidity support from Bank Indonesia to the Indonesia Bank Restructuring Agency (IBRA).

* Transfer to IBRA control of seven banks accounting for more than 75 percent of past BI liquidity support and seven banks which have borrowed more than 500 percent of their capital (done).

* Start reduction of export taxes on logs, sawn timber, rattan and minerals.

* Phase in resource rent taxes on logs, sawn timber and minerals.

* Remove ban on palm oil exports and replace by export tax of 40 percent.

* Lift restrictions on foreign investment in wholesale trade (done).

* Establish monitoring system for structural reforms.

* Make credible progress toward an agreement on corporate debt restructuring.

* Enact government regulation in lieu of law to amend the bankruptcy law and establish a special commercial court.

The following measures are due to be implemented by Friday, April 24:

* Publish key monetary data on a weekly basis.

* Announce seven state enterprises to be privatized in the 1998/1999 fiscal year.