International Monetary Fund's statement on RI economic program
International Monetary Fund's statement on RI economic program
WASHINGTON (Reuters): The following statement was issued on
Wednesday by Alassane Ouattara, a deputy managing director at the
IMF, on Indonesia's economic program:
I am pleased to announce that in support of the Indonesian
government's economic program, the IMF's executive board today
approved the completion of a review of Indonesia's stand-by
credit.
The board also approved an increase in the financing under the
36-month stand-by credit by SDR 1 billion (about US$1.3 billion),
to SDR 8.3 billion (about US$11 billion).
Following the completion of the review, SDR 734 million (about
US$1 billion), is available to Indonesia immediately, bringing
total IMF disbursements under the credit to SDR 3.7 billion
(about US$4.9 billion).
The full amount of the additional financing approved today is
to be made available before end-March 1999, in addition to the
IMF resources already committed for the period."
New financing for the program is also to be provided through
an informal arrangement among bilateral creditors that involves
the rescheduling of principal payments falling due or the
provision of an equivalent amount of new money. Additional
financing will also be made available by Australia, China, the
Asian Development Bank and the World Bank.
The total additional financing for the program, including the
increase in the IMF stand-by credit, amounts to over US$6
billion, all of which is to be provided before end-March 1999.
This comes on top of substantial external financing previously
committed by multilateral institutions, and by Japan and other
bilateral donors.
In completing the review, executive directors commended the
authorities for good policy implementation in very difficult
circumstances. They welcomed the economic priorities set by the
government to prevent a further economic decline, reduce
inflation, and to substantially intensify its efforts to protect
the poor from the worst effects of the crisis.
In this connection, strengthening of the distribution system
was an urgent priority. Directors also agreed that a much higher
budget deficit was necessary to accommodate higher subsidies on
essential items and other social spending.
Continued firm control over monetary policy and rapid
implementation of the reforms under way in the banking system and
corporate restructuring were also viewed as policy priorities.