IMF completes review of RI's economy, reform
A'an Suryana, The Jakarta Post, Jakarta
The International Monetary Fund (IMF) completed on Saturday reviewing the country's economic situation and the implementation of economic reform measures here, according to a senior government official.
Mahendra Siregar, an expert at the Office of the Coordinating Minister for Economy, said the IMF review team was heartened by the relatively stable macroeconomic situation.
"The outcome (of the review) is encouraging. The IMF noticed the Indonesian economy had stabilized," he told The Jakarta Post on Saturday, pointing out positive factors such as the stable exchange rate of the rupiah against the U.S. dollar at around Rp 9,000, slowing inflation, and the decrease in Bank Indonesia's benchmark interest rate.
The IMF review team, led by the fund's senior advisor for Asia Pacific, Daniel Citrin, had been in Jakarta for a week. The completion of such review work is normally followed by the issuance of a new letter of intent (LoI) by the government, which basically contains a set of new economic targets and an economic reform agenda.
The review team will now report to the IMF board of directors in Washington. If the latter approves the LoI, the fund will disburse its next US$350 million loan tranche for the country. The last loan tranche was made in April.
Mahendra said the IMF board was expected to convene in September to decide on the approval of the seventh LoI.
The IMF is providing Indonesia with a three-year $5 billion bailout loan program. The country has so far received a total of $2.6 billion.
No details of the new LoI have been made available yet.
Meanwhile, Anggito Abimanyu, an official at the finance ministry, was quoted by Antara as saying that among the economic measures included in the seventh LoI were plans to issue perpetual promissory notes (PPN) and the time schedule for the sale of government shares in several banks.
Reports have said the government and Bank Indonesia have agreed to settle a dispute over who should be responsible in covering massive liquidity support channeled to ailing banks during the late 1990s financial crisis.
Under the deal, the government would issue Rp 134.5 trillion of PPNs to the central bank. The bonds would not jeopardize the government's finances because PPNs have no interest rate or maturity. However, the government would have to pay interest if the central bank's capital condition was under threat.
Anggito added the government would sell shares in Bank Niaga this September, followed by the sale of a stake in Bank Danamon.
Mahendra said the government had also reported to the IMF review team on progress in legal reform, including the completion of a draft bill on the anticorruption commission, and a draft on the amendment to the bankruptcy law.
He said lawmakers were expected to debate the two bills next month.