IMF says $41b deal enough for RI

IMF says $41b deal enough for RI

WASHINGTON (Reuters): Indonesia's existing US$41 billion rescue package from the international community will likely be enough to meet a financing gap forecast in the country's latest International Monetary Fund plan, the IMF's second most senior official said on Monday.

"I do not think it is an enlargement of the package," First Deputy Managing Director Stanley Fischer told Reuters in an interview. "We are going to go to the same people in the program to provide the extra funding. I do not think that this is being added to the commitments."

The rescue package, agreed last November and renegotiated on several occasions, comprises both a first line of defense of loans from the IMF and other multilateral donors and a second line of defense of bilateral aid.

The United States promised $3 billion for this second line of defense, but this money, like that of other country donors, has not yet been handed over.

Indonesia's latest deal with the IMF said that the country would need $4-6 billion in loans to repair the damage caused by weeks of social unrest and political upheaval.

He also said Japan's economic weakness has deepened and lengthened Asia's financial crisis more than anyone expected, robbing the ailing tigers of a crucial export market.

Fischer said that Japan's ability to recover from its own recession and from deep financial sector woes was "one of the really important factors in East Asia." He said the crisis had spread rapidly because many of the countries shared similar problems.

"The weakness in the Japanese economy and the drag it exerted on the Asian economies was not appreciated at the time," he said in an interview marking the first anniversary of the start of the Asian economic storm.