Govt expects next IMF loan later this month
Dadan Wijaksana, The Jakarta Post, Jakarta
The government said Tuesday it expected the International Monetary Fund (IMF) to disburse around US$340 million of its next loan tranche to the country later this month.
Minister of Finance Boediono said the IMF's board of executives in Washington were expected to convene sometime between June 21 and June 24 to discuss the disbursement.
"The (IMF)'s board of executives will convene (sometime between) June 21-24 over the next loan tranche to Indonesia, and if approved, in two or three days the funds will be disbursed," Boediono told reporters on the sidelines of a hearing with the House of Representatives Commission IX on financial affairs.
The IMF's board meeting follows the signing of the latest Letter of Intent (LoI) last week by the government, under which the government made new economic reform targets.
The LoI contains a set of targets under which the IMF measures the country's economic reform progress, with failure to comply leading to a halt in its lending program.
The IMF is in the process of a three-year US$5 billion loan for crisis-hit Indonesia, and last week's signing was the sixth LoI. The IMF loan would supplement the country's foreign exchange reserves, but cannot be used for financing the state budget.
As reported earlier, the LoI contains new promises to the Fund including the latest reports of the country's economic performance.
Among other things, the government promised to push ahead with plans to sell a number of banks before the end of this year including a majority stake in Bank Danamon next month and in Bank Lippo by year-end. The sale of a 30 percent stake in state-owned Bank Mandiri would be launched in the third quarter.
The government is now in the process of selling up to 71 percent stake in Bank Niaga.
On fiscal policy, the government is committed to keeping the state budget deficit within the target of 2.5 percent of gross domestic product (GDP) this year, although the deficit in the first three months of the year was higher than expected.
The budget deficit in the first quarter of this year stood at Rp 5.6 trillion, or above the target of Rp 2.7 trillion, as revenues declined due to the massive flooding that took place in January and February.
As for the monetary policy, the government would maintain a cautious stance in the period ahead to be consistent with its main objective of bringing inflation down to a single digit level.
Inflation has been manageable over the last three months, a development that the government hails as encouraging, in line with the upward trend of the rupiah against the U.S. dollar and a slow growth in base money.
This has allowed the central bank to gradually lower its benchmark interest rate from more than 17 percent in January to around 15 percent in recent weeks.