Govt to set new trade finance

JAKARTA (JP): The government will introduce a new trade finance scheme to help exporters import raw materials and export their products.

Director General of International Trade Djoko Moeljono said here yesterday that the new scheme would complement the current scheme, in which the government guarantees Indonesian firms' letters of credit.

Djoko said the utilization of the current government's guarantee scheme was below par as only 16 companies used the facility, with a total guaranteed fund of US$136 million -- out of $1 billion placed by Bank Indonesia at 10 foreign banks.

He noted that the current scheme was not effective as local banks did not have confidence in importers' ability to settle their dues owing to the sharp depreciation of the rupiah against the U.S. dollar.

The director general, however, refused to explain the details of the new scheme and only said the new scheme would be announced soon. (rid)