Mar'ie wants WB and ADB to cope with volatile yen

JAKARTA (JP): Minister of Finance Mar'ie Muhammad yesterday urged the World Bank and Asian Development Bank (ADB) to take more initiatives to maintain the stability of the Japanese yen rate against the U.S. dollar, since a high volatility would affect the world economy.

"I have repeatedly asked the World Bank and ADB to initiate efforts, in cooperation with monetary authorities of Japan and the United States, to prevent the yen rate from wild fluctuations," Mar'ie told newsmen yesterday.

The finance minister was asked by newsmen yesterday to comment on the surge of the yen against the dollar over the last two days and its impact on Indonesia.

The dollar weakened on Tuesday against the dollar, falling below 100 for the first time since World War II.

He said the high yen appreciation would hurt Indonesia because more than 50 percent of its foreign debts are denominated in the yen.

But the stronger yen also would hurt other borrowers, including the World Bank and ADB, because they get a portion of their credit funds from Japan, he said.

Nonetheless, Mar'ie was optimistic that the yen would again stabilize at a higher rate due to the intervention from the Japanese and U.S. central banks.

"We don't need to ask for debt rescheduling because we are able to repay and service our debts," he added.

Dollar rate

Meanwhile, in London, the dollar was firmer in European trading yesterday, but off its earlier highs on light profit- taking after rising on the back of upbeat comments by U.S. officials.

Against the German mark, the dollar was quoted at 1.6070 marks, up 0.45 pfennigs from Wednesday's London close, while it gained 0.45 against the Japanese yen to 101.15.

The pound was quoted at US$1.5308 and 2.4590 marks compared with $1.5310 and 2.4580 respectively at the close on Wednesday.

Dealers said trading remained nervous despite attempts by U.S. President Bill Clinton, Treasury Secretary Lloyd Bentsen and Federal Reserve Chairman Alan Greenspan to shore up the dollar in comments Wednesday.

In Frankfurt, the dollar opened at 1.6063 German marks, up from 1.6040 at the previous close.

In Zurich, the dollar opened at 1.3500 Swiss francs, up from 1.3465 at the previous close.

In Brussels, the dollar opened at 33.10 Belgian francs, up from 32.96 at the previous close.

In Paris, the dollar opened at 5.5070 French francs, up from 5.4750 at the previous close.

In Tokyo, the dollar closed at 101.31 Japanese yen, up from the previous close at 100.65.

In Singapore, the dollar closed at S$1.5273, down from S$1.5275 at the previous close.

In Hong Kong, the dollar closed at HK$7.7295, up from HK$7.7280 at the previous close.

Gold opened in Zurich at $389.75, down from $392.85 at the previous close. In London, it opened at $389.50, down from $390.50 from the previous close. Gold closed at $389.05 in Hong Kong, down from $393.25 at the previous close.

Silver opened in Zurich at $5.40, down from the previous close at $5.53, while in London it started trading at $5.39, down from the previous close at $5.43. (fhp/vin)