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)