INDRA caps September debt rate at Rp 12,314

JAKARTA (JP): The Indonesian Debt Restructuring Agency (INDRA) set on Monday the rupiah exchange rate for the conversion of overseas debts of local corporate debtors participating in the agency's debt restructuring program this month at Rp 12,314 per U.S. dollar.

INDRA chairman Sumitro said in a statement that the new exchange rate was based on the moving average market rate during the 20 working days in August.

The agency set the cap exchange rate at Rp 13,233 to the dollar on August 3, when the debt program first started.

INDRA will announce its best exchange rate every month until June 1999, when the program is to be closed for participation, Sumitro said.

INDRA is a government-sponsored agency with a mission to help restructure the country's more than US$64 billion of private- sector overseas debts, of which more than $34 billion is due this year.

Under the program, which is a result of the Frankfurt agreement with a creditors' committee in June, debtors joining the scheme would have to have first sought approval from their lenders to reschedule the debts in eight years, including a three-year grace period.

Debtors would then make monthly installments in rupiah (based on INDRA's locked-in conversion rate), and INDRA will pay the lenders in dollars, but only the interest during the three-year grace period.

The conversion rate is expected to improve over time but is guaranteed not to get worse.

Debtors entering the debt restructuring scheme at a higher exchange rate will receive a refund of the difference in June 1999 when INDRA resets the exchange rate.

The debt restructuring program is expected to help reduce demand for dollars which in turn will help strengthen the ailing rupiah.

INDRA did not announce whether there had been any participation in the debt program as of Monday.

The rupiah closed at more than Rp 11,000 to the dollar Monday, compared to Rp 2,450 in July last year before the crisis started. (rei)