Currency board 'an option' for RI
Currency board 'an option' for RI
NEW YORK (AFP): Setting up a currency board linking the rupiah
to the dollar could help stabilize Indonesia's currency, though
this is not the only option, IMF Managing Director Michel
Camdessus said Friday.
"It's an option available but it's not the only one," the
International Monetary Fund chief was quoted by as saying.
A currency board would be responsible for maintaining a fixed
exchange rate between the rupiah and the dollar and guarantee
full convertibility.
Camdessus warned that such a board would not work if a reform
program pushed by the IMF were not fully implemented.
"If the program fails to restore the rupiah because of the
lack of cooperation from the government, then a currency board
would not be the solution," he said.
"I am not pessimistic about Indonesia provided the program is
applied," he said at a news conference here.
Camdessus stressed that uncertainty remained over the
political future of Indonesia and the economic policies that will
be adopted after the next elections.
Japan's ruling Liberal Democratic Party (LDP) also said
Saturday it would send a mission to Indonesia, Singapore,
Thailand and Hong Kong to meet the countries' finance ministers
and central bankers.
The LDP officials, headed by former foreign minister Taro
Nakayama, is scheduled to leave here Sunday for a week-long tour,
Kyodo News agency quoted party officials as saying.
They are expected to look into the state of economies and
finances in the countries, the officials said.
The Japanese government said it would study a Singapore
proposal for Indonesia's Asian neighbors to guarantee letters of
credit for imports to the cash-strapped nation, Prime Minister
Goh Chok Tong's office, the Associated Press reported.
While visiting Indonesia's President Soeharto on Tuesday, Goh
had proposed that multilateral or bilateral guarantees.
In a phone conversation with Goh on Friday, Japanese Prime
Minister Ryutaro Hashimoto said he would study the idea.
Also, Japan's Finance Ministry will send a high-level
delegation to Indonesia in the coming week to assess that
country's economic difficulties and determine whether Japan
should provide further support.
After hearing the delegation's report, Hashimoto and Finance
Minister Hikaru Matsunaga will decide whether any additional
support for Indonesia should be announced before the Feb. 21
meeting in England of finance ministers and central bankers from
the Group of Seven nations.