IMF team here to help defuse crisis
IMF team here to help defuse crisis
JAKARTA (JP): A team from the International Monetary Fund
(IMF) began talks with Indonesian economic ministers yesterday
shortly after arriving here to help defuse the country's economic
crisis.
The delegation, led by First Deputy Managing Director Stanley
Fischer, indicated there was some way to go in resolving the
country's financial crisis.
"We are making progress...it's starting fine," Fischer told
journalists after a three-hour meeting with Indonesian ministers
at the Ministry of Finance.
"We are discussing the entire reform program and how to move
ahead with it," he added.
Fischer, however, refused to give specific details, saying:
"the IMF mission is here for a few days, and today (yesterday) is
just a beginning."
The IMF managing director Michel Camdessus is expected here
Wednesday and according to Fischer, their negotiations with the
government may continue until Thursday.
Minister of Finance Mar'ie Muhammad said it was too early to
provide details of the substance of yesterday's discussions with
the IMF team.
"It's still too premature for me to comment on the progress.
But I would say that the discussions were fruitful, productive
and quite impressive," Mar'ie said.
Asked about the outlook for Indonesia's battered financial
markets today, Mar'ie said: "I am always optimistic with the
market."
International investors watched in horror as Indonesia slid
into financial chaos last week.
The rupiah collapsed to an all-time low of 10,000 against the
U.S. dollar Thursday on international concerns that the
government might be backsliding out of its commitments to
economic reforms attached to the IMF rescue package of US$43
billion.
The rupiah recovered to 7,600 on Friday, but it still was less
than half its value against the dollar in July.
The Jakarta stock market has similarly nose-dived. Its main
price index closed Friday at 340 points, compared to a level of
740 on July 8.
The currency's free fall has led to panic buying of staple
goods in the stores of some cities.
The financial chaos prompted U.S. President Bill Clinton to
telephone President Soeharto to discuss the crisis last Friday.
Clinton announced he would send Deputy Treasury Secretary
Lawrence Summers to Indonesia. Summers is expected here this
afternoon from Singapore.
In a related development, Australian Prime Minister John
Howard yesterday interrupted his New Year holiday to call
Soeharto to express concern about Indonesia's deepening crisis.
"The prime minister said Australia was concerned for Indonesia
as a near neighbor and concerned in particular about the IMF
package. He said Australia strongly supported the IMF package
while recognizing the difficulties involved for Indonesia,"
Howard's spokesman was quoted by AFP as saying.
"He (Soeharto) understood the need for Indonesia to get its
house in order and restore confidence in it," the spokesman said.
There is also increasing discontent among Indonesians as
various rumors spread in the market, ranging from government
plans to liquidate more banks, freeze bank deposits in U.S.
dollars, convert rupiah bank deposits into government bonds or
even slash the nominal value of the rupiah.
Bank Indonesia governor J. Soedradjad Djiwandono said last
night that all such rumors were baseless and had been
intentionally spread by irresponsible people to worsen the
situation.
He called on the public to trust the government and not be
easily incited by wild rumors. (rid)
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