Government sends latest letter of intent to IMF

Government sends latest letter of intent to IMF

Dow Jones, Jakarta

The International Monetary Fund said Wednesday it had received
the latest letter of intent from the Indonesian government, which
should pave the way for the next installment of loans under a $5
billion lending program.

The letter of intent - in which the Indonesian government
promises economic reforms in return for loans - will go to the
IMF's board in Washington D.C. in early December, said David
Nellor, the Fund's Jakarta representative.

The next loan tranche, if approved by the Fund's board, is
worth $300 million-$400 million.

Indonesia needs the IMF program and it's attached economic
reforms to restore confidence in the country.

According to the latest letter of intent, Indonesia has made
some progress in meeting reform commitments under it's previous
letter of intent to the fund, Nellor said.

The government has proposed a budget for 2003 which should
maintain macroeconomic stability and has taken steps to make it's
public debt more manageable.

Jakarta has also taken steps to raise funds from the sale of
assets taken over from the banking sector since the 1997
financial crisis.

The Indonesian Bank Restructuring Agency has raised Rp 30.7
trillion (US$3.4 billion) of its 2002 target of Rp 42.8 trillion
so far this year, its Chairman Syafruddin Temenggung said
Tuesday.

Syafruddin added that he's optimistic the agency will be able
to raise the remaining Rp 12.1 trillion by the end of the year.

IBRA recently got Rp 1.02 trillion from the sale of a 51
percent stake in PT Bank Niaga to Commerce Asset Holding Bhd.,
Malaysia's second-biggest financial services group.

It is also in the process of selling thousands of property
assets and bank bad loans.

The government will use the proceeds to help finance the
deficit in the state budget.

In early August the IMF praised Indonesia for reducing
expenditures, and reining in the budget deficit, which will total
2.5 percent of gross domestic product this year, down from 3.7
percent last year.