IMF mission due here next week

IMF mission due here next week

JAKARTA (JP): The International Monetary Fund (IMF) will send
a mission to Jakarta next week in a bid to reach an agreement
with the country's new economics team on a number of economic
reform programs, the fund's senior resident representative in
Indonesia, David Nellor, said in a press statement on Tuesday.

Nellor said the mission would be led by IMF deputy director
for the Asia Pacific region Annop Singh.

He added that the IMF executive board was expected to meet in
Washington early next month to decide whether to approve the
country's economic reform programs as stipulated in the letter of
intent (LoI).

The approval of the new LoI will pave the way for the
disbursement of IMF's US$400 million loan tranche to the country
that was put on hold late last year amid signs that the
government was wavering on the implementation of its reform
programs.

Elsewhere, Nellor said he had held a series of meetings over
the past few days with Coordinating Minister for the Economy,
Dorodjatun Kuntjoro-Jakti, Bank Indonesia Governor Sjahril
Sabirin and other ministers in the new economics team.

"I was encouraged by their shared focus on key policy issues
and, most importantly, their determination to implement policy
reforms to strengthen the financial sector, fiscal management and
other key areas," he said.

Analysts have said the signing of a new agreement with the IMF
would further boost the rupiah, which has been rallying since
Megawati Soekarnoputri was appointed president and the new
Cabinet was installed. The rupiah jumped to an 11-month high of
Rp 8,400 per U.S. dollar on Tuesday.

The agreement with the IMF will also prompt the Paris Club of
creditor nations to agree to reschedule the country's sovereign
debt maturing this year.

The Paris Club is scheduled to meet with the government on
September 10.

A failure to obtain the debt rescheduling facility will
trigger a fiscal crisis, economists have warned. (rei)