Camdessus hopeful for RI deal soon

Camdessus hopeful for RI deal soon

BORDEAUX, Paris (Reuters): International Monetary Fund (IMF) Managing Director Michel Camdessus said yesterday that IMF talks with Indonesia were extremely constructive and that he hoped for an important deal soon.

"On Indonesia, we have a mission negotiating in Jakarta. What I hear from the negotiations is that they are evolving in an extremely constructive climate," he told Reuters.

"I am hopeful that we could sometime soon announce a very important arrangement (IMF crisis package), which would create the necessary framework for Indonesia to come out of this crisis stronger than it was, let's say, a year ago."

Camdessus was in Bordeaux for a Euro-Latin American business conference.

The Indonesian rupiah was volatile in late Monday trade on plans for a central bank news conference.

It was not immediately clear whether central bank directors would announce fresh measures, including details of an IMF-led assistance package, or merely explain steps so far in the currency crisis or other issues.

Meanwhile, Australian Treasurer Peter Costello said yesterday it was unlikely Australia would be asked for bilateral support for the Indonesian IMF package.

"Given the state of reserves in Indonesia, and given the proposed Fund program, it is not expected that Australia will be asked for bilateral support," Costello told parliament.

Costello said the International Monetary Fund's managing director had stated Indonesia's economic fundamentals were generally sound and its international reserves position was quite strong.

"There are, however, a number of structural issues to be addressed as part of looking at the Indonesian financial sector," Costello said.

"We are confident that with the IMF's assistance, those matters can be effectively managed," he said.

Indonesia said on Oct. 8 that it was approaching the IMF, World Bank and Asian Development Bank for assistance to help shore up its currency, the rupiah, a move Costello said the Australian government welcomed.

An IMF delegation is currently in Indonesia, assessing economic developments and negotiating with authorities on the assistance program.

In August, Australia said it had agreed to contribute US$1 billion of a US$17.2 billion IMF rescue package for Thailand. On Monday, Costello said that was firmly linked to the IMF reforms being implemented.