IMF inks final loan to Indonesia

IMF inks final loan to Indonesia

Agencies, Jakarta

The International Monetary Fund (IMF) approved on Friday a US$505 million loan to Indonesia, the final portion of the $5.3 billion support program devised after the 1997-1998 Asian economic crisis.

Although Jakarta decided not to ask the international lender for a new support program, the country will enter into the IMF's "post-program-monitoring" scheme, under which it will continue to check economic conditions and advise on policy if necessary.

"An impressive fiscal consolidation and disinflation effort, together with reduced external vulnerability, have laid the basis for a sustained improvement in growth and employment prospects in the period ahead," IMF deputy managing director Shigemitsu Sugisaki said in a statement quoted by Dow Jones news wire.

The IMF also expressed optimism about the nation's efforts to continue economic reform.

"Satisfactory progress continues to be made with key structural reforms. The divestment of government ownership in banks is proceeding well.... It will be important to sustain these reform efforts and, in particular to follow up decisively on the recent steps," Sugisaki said.

IMF's Indonesia mission chief Daniel Citrin was reported by Agence France-Presse as saying the economy has stabilized thanks to the government's efforts to restore macroeconomic stability.

The country has already announced its post-IMF reform strategy -- praised by Sugisaki as a "sound framework". The World Bank says Indonesia must raise about $10 billion in 2004 to refinance its debts.