IMF says loans to Russia, Indonesia remain on hold
IMF says loans to Russia, Indonesia remain on hold
WASHINGTON (Dow Jones): The International Monetary Fund remains resolute in its suspension of loan programs with Russia and Indonesia as it awaits separate audit reports from PricewaterhouseCoopers.
Thomas Dawson, director of external relations at the Fund, told reporters Wednesday the IMF hasn't altered its demand that the Indonesian government publish the full investigation by PricewaterhouseCoopers into the Bank Bali scandal.
At the same time, the IMF board awaits a report by the chartered accountants into recent activities of subsidiaries of the Russian central bank.
Both Russia and Indonesia have had their loan programs placed on hold, with Moscow more likely to receive funds first.
The probe into the Indonesian bank scandal is complete but the government has stalled in publishing it. Dawson said the PricewaterhouseCoopers report into the activities of Russian central bank subsidiaries is nearing completion.
Also, Russia is meeting or exceeding most of the economic and fiscal targets set with the IMF back in July, when the Fund approved a $4.5 billion loan package to be used exclusively to retire existing IMF debts owed by Moscow.
However, Russia must still put in place a series of safeguards against possible misuse of official funds.
"I think our expectation is that study is close to being completed and probably would be ready in the next few...weeks, if not days," Dawson told reporters.
"The second issue that's up is having assurances regarding the safeguarding of (IMF) resources in...Russia and that's an issue that many on the (IMF) board have raised," he said.
Some Russian officials had voiced hopes that the IMF will be ready to approve the next installment of $640 million during October but that appears unlikely.
Dawson said he is unable to say whether Russia will even be able to secure these funds in November, given the number of conditions that must be satisfied first.
He ruled out reports that the IMF has set as a new condition on the next loan installment the requirement that the central bank close or sell its European bank subsidiaries.
"Certainly there has been a sort of trend worldwide that central banks (should) engage in commercial banking activities," Dawson said of this issue, adding that "it is not a condition for the next disbursement."
In Indonesia, meanwhile, the PricewaterhouseCoopers report remains the subject of litigation and is still no closer to publication.
"We still are expecting that it will be published and are anxious that go forward," Dawson said.
The IMF approved a $460 million loan installment for Indonesia Aug. 3 but subsequently put discussions on the next quarterly disbursement on hold until the authorities in Jakarta addressed its concerns about the Bank Bali scandal and the anti- independence violence in East Timor.