IMF okays $270m loan for Thailand
IMF okays $270m loan for Thailand
WASHINGTON (Reuters): The International Monetary Fund approved a payment of US$270 million from its $3.9 billion loan to Thailand yesterday and praised it for pressing ahead with economic reforms.
IMF Managing Director Michel Camdessus said in a statement that the fund had approved the loan at a board meeting.
"Directors strongly commended the Thai authorities for resolutely implementing the economic program in very difficult circumstances and noted that this approach was increasingly being reflected in improved market sentiment," he said.
The payment was the third installment of the IMF's loan to Thailand, and it means Bangkok has received about $2.7 billion.
The loan forms part of a $17 billion international rescue package which also includes money from the World Bank, the Asian Development Bank and Asian states.
Camdessus said the IMF board had also approved changes to earlier targets, allowing a Thai budget deficit of two percent of gross domestic product and stepping up efforts to strengthen the financial system. "Directors supported key modifications...aimed at alleviating the impact of the sharp economic downturn and strengthening the currency," he said.
Camdessus said Thailand appeared to have adequate funds to keep the currency steady and maintain adequate foreign exchange reserves. He added: "The IMF will continue to monitor the situation closely to ensure that the program remains properly funded at all times, including, if necessary, by the provision of additional funding."
Analysts have said Thailand's economy is starting to recover from a slump triggered by a currency collapse. They are much more cautious about the situation in Indonesia, where reforms appear to be stalling and the authorities dragging their heels on implementing the reform package.
The payment was the third installment of the IMF's loan to Thailand, and it means Bangkok has received about $2.7 billion.
The loan forms part of a $17 billion international rescue package which also includes money from the World Bank, the Asian Development Bank and Asian states.
Camdessus said the IMF board had also approved changes to earlier targets, allowing a Thai budget deficit of two percent of gross domestic product and stepping up efforts to strengthen the financial system. "Directors supported key modifications...aimed at alleviating the impact of the sharp economic downturn and strengthening the currency," he said.
In Bangkok, Thai finance chiefs welcomed yesterday the release of the latest tranche of international rescue funds and Washington's promise to back more credit if required.
Bangkok also pledged to carry through reforms pledged in exchange for its massive IMF-led bailout.
Finance Minister Tarrin Nimmanahaeminda said he was encouraged by U.S. Treasury Secretary Robert Rubin's comment that Washington would support extra credit for Thailand following the International Monetary Fund's (IMF) approval Wednesday of the next loan installment of $270 million.