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.