Camdessus sees possible RI private debt accord
Camdessus sees possible RI private debt accord
PARIS (Agencies): IMF managing director Michel Camdessus said on Monday that a debt deal with Indonesia was possible at a May 26 meeting in Frankfurt with creditor banks.
"I am convinced that the new meeting in Frankfurt on May 26 will be a step forward, probably a final step, to a rescheduling of this debt which will be an absolutely decisive element for Indonesia's economic recovery," he was quoted as saying by Reuters
Camdessus was talking to reporters after meeting President Jacques Chirac.
Indonesia's Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita said in Tokyo earlier on Monday he was confident that remaining debt issues could be settled in Frankfurt.
Indonesia and its creditor banks held three days of talks which ended on Sunday without an agreement on the most thorny issue of resolving the debt held by companies.
But the bank steering committee, a group of creditor banks, said in a statement on Monday that even as more work needed to be done for corporate debt problems, it and Indonesia made progress in finding solutions for the problems of Indonesian banks' foreign currency debt and trade finance.
The terms of any individual restructuring will have to be agreed between individual debtors and creditors but it was agreed that the framework would be voluntary and not require debt forgiveness, the statement said.
In Tokyo, Stanley Fischer, IMF's deputy managing director said yesterday the agreement reached last weekend between Indonesia and its international bank creditors to roll over part of the country's debts is a "significant achievement", said
Fischer said he thought the initial reaction to the Tokyo meeting had been too gloomy, adding that he had never expected it to reach agreement on private-sector debt, estimated at some $80 billion, the paper said.
But he also said he felt positive that an agreement on this would be reached at the next meeting on the issue, scheduled for May 26 in Frankfurt.
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Another IMF's senior official said in Washington that IMF is willing to back a plan for $8 billion in Indonesian government guarantees of the nation's external interbank liabilities in 1998,
The senior IMF official, speaking Monday to Dow Jones Newswires on condition of anonymity, said the guarantee plan "will follow Korea in having government guarantees of the interbank" liabilities.
His remarks show a major hurdle in the nearly two-month-old debt deliberations has been cleared, particularly since the IMF initially was concerned about widespread demands for government guarantees.
A range of corporate debt issues still must be resolved before an overall debt-restructuring framework is settled. But the interbank issue have moved forward "faster than anyone expected," the senior IMF official said.
He added that given the progress made in debt talks last week in Tokyo, the IMF is expecting Indonesia will get "much closer to a deal" on the overall framework at the next round of talks between Indonesia and foreign creditors starting May 26 in Frankfurt.
Total Indonesian interbank liabilities to foreign institutions are placed around $16 billion, which is only a modest portion of the $80 billion in external debts currently subject to negotiation.
Corporate debt, which totals around $64 billion, was expected to be the most difficult issue to settle even before the negotiations began. And the fact the Tokyo debt talks didn't resolve the corporate issues isn't surprising, the senior IMF official said.
The IMF is hoping that government guarantees on interbank debts due only in 1998 will be sufficient when coupled with actions to provide relief on trade finance debts, and debts owed by Indonesia's corporate sector.