Govt expects next IMF loan later this month
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.
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.