JAKARTA: Indonesia's central bank said on Saturday its international reserves fell to US$28.14 billion as of the second week of May from $28.58 billion the previous week.

International reserves are calculated using gross foreign exchange reserves and only include liquid assets.

The bank said in a statement net foreign exchange reserves fell to Rp131.03 trillion in the second week of May from Rp131.09 trillion the previous week, based on an official rupiah book rate of Rp 7,000 to the dollar.

By early Saturday trade, the rupiah was quoted at Rp 9,080/9,100 to the dollar.

Bank Indonesia also said base money was down to Rp114.179 trillion in the same period from Rp116.779 trillion the previous week. --Reuters

Iran okays foreign investment

TEHRAN: Iran's highest arbitration body approved direct foreign investment of up to 25 percent in the country's various economic sectors, the official IRNA news agency reported Saturday.

The Expediency Council, headed by former conservative president Ali Akbar Hashemi-Rafsanjani, ruled moreover that foreign investment may not exceed 35 percent in any given subsector, with the government being responsible for designating what those subsectors are.

The decision comes after two years of infighting between Iran's reformist government and conservative clerics and opens up the possibility of foreign investors taking stakes in Iranian companies, something virtually impossible up until now.

In effect, the council's decision gave a green light to a bill on foreign investment that has been repeatedly adopted by the reformist parliament over the past two years and repeatedly rejected by the conservative-dominated Guardians' Council.

The Expediency Council will decide next week on other points of the bill, including the terms for repatriating capital and profits.

Russia eyes 55% jump in privatization JP/RUSSIA

MOSCOW: Russia forecast Saturday it would fill its coffers next year with more than 54.8 billion rubles (US$1.8 billion) from a wide range of privatization initiatives including the sale of state-owned business.

The year 2003 represents a "new phase" for privatization and management of public assets, the deputy minister in charge of privatization Alexander Braverman said at a press conference.

His forecast for earnings generated from privatization schemes is up 55 percent from estimated 2002 figures and compares with just 10.1 billion rubles in 2001.

Sales in public industries for 2003 are expected to garner 51 billion rubles.

Major initiatives will include the sale of one of Russia's largest steel factories, Magnitogorsk Metallurgy Factory, in which the state still owns 17 percent, as well as several airlines.

Also included is the public offering of 25 percent (minus two shares) of telecommunications group Sviazinvest, which will undergo a restructuring beforehand.--AFP

Taiwan sees economic recovery in 2002

TAIPEI: Taiwan's economy is heading for a solid recovery in 2002 on the back of expansion in exports, investment and consumption, reversing its worst decline last year, officials and analysts said.

The cabinet-level Directorate General of Budget, Accounting and Statistics (DGBAS) Friday reported a 0.89 percent growth in gross domestic product (GDP) for the island in the first quarter from a year earlier, snapping a downward trend in three previous straight quarters.

It also revised upwards its 2002 GDP growth forecast to 2.55 percent from 2.29 percent estimated in February, reversing a 1.9 percent decline last year.

The negative figure in 2001 was first ever yearly drop amid shrinking overseas demand and less domestic investment on the back of the global economic slowdown.

The DGBAS forecast GDP would grow 1.53 percent year-on-year in the second quarter, to be followed by 3.86 percent and 3.89 percent respectively in the last two quarters.

Local think-tanks expect the island's 2002 GDP growth to come in at 2.6-3.0 percent, and some economists have predicted it would exceed 3.0 percent.--AFP