BI to join Bank for Int'l Settlement

JAKARTA (JP): Acting governor of Bank Indonesia Anwar Nasution said on Friday that the central bank would join the Bank for International Settlement (BIS) after winning the approval of the House of Representatives.

Anwar said that Bank Indonesia would benefit from BIS' financial facilities, information trade and technology exchanges.

"BIS is like the United Nations of the world's central banks," Anwar told reporters on the sideline of a hearing with the House's Commission IX, which oversees financial affairs.

BIS is an international organization that fosters cooperation of central banks and other international financial institutions.

The bank does not accept deposits nor does it provide financial services to private individuals or corporate entities.

Anwar said that in order to join BIS, Bank Indonesia would have to pay a one time membership fee of US$42 million, a quarter of which must be paid up front.

"As permitted by the House, we will pay the fee that will automatically put as a member of BIS," he said.

Asked whether BIS could help strengthened the rupiah, he said that Indonesia needed first to rebuild its ailing banking sector.

"We can't just ask BIS to inject their money into us, who do we think we are?" he said.

However, Anwar added, central banks of neighboring countries were willing to help Indonesia stabilize the rupiah since it concerned their national interest. He did not further elaborate on the central banks' assistance.

Headquartered in Basel, Switzerland BIS was founded in January 1930 under the Hague Conference, and currently members over 90 central banks.

In its website, BIS described its role as a forum for international monetary and financial cooperation between central bankers.

It said that the aim was to achieve mutual understanding of monetary and economic questions and to facilitate international cooperation in particular the monitoring of and support to the international financial system.

The bank accepts deposits from its members with a significant portion of the worlds' foreign exchange reserve kept by BIS.

Since last year, 45 central banks had voting rights and representation at annual General Meetings.

The bank's board of directors comprises the governors of the central banks from Belgium, France, Germany, Italy and the United Kingdom with the chairman being the board of governors of the US Federal Reserve System. (bkm)