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Mon, 28 Sep 1998

JP/Reserve funds drop to Rp 67.5 trillion

Reserve funds drop to Rp 67.5 trillion

JAKARTA (JP): The amount of reserve money during the third week of this month declined by Rp 907 billion (US$82 million) to Rp 67.5 trillion on Sept. 23 compared to the level in the previous week, Bank Indonesia said late Friday.

According to the central bank, the two-week consecutive decline resulted from a lower amount of currency in circulation.

"Deposits at Bank Indonesia also increased, reflecting a better liquidity situation in domestic banks," the central bank said in its latest weekly report.

The central bank's net domestic assets (NDA) fell to minus Rp 73.2 trillion, which was still far below the adjusted target set by the IMF at minus Rp 55.3 trillion.

The lower NDA level was due to various reasons, including a Rp 560 billion contraction in net claims on the government, a Rp 201 billion increase in claims on the Indonesian Bank Restructuring Agency (IBRA), and a Rp 328 billion expansion in open market operations, the central bank said.

It also said that gross foreign reserves during the week fell by $72.9 million to $20.6 billion compared to the level on September 15.

It said that net international reserves (NIR) also declined, by $85.3 million to $14.1 billion due to servicing the interest of government external debt and selling dollars for rupiah to fund greater government spending.

"Despite the lower NIR level, it is still above the adjusted target set by the IMF at $12.5 billion," it said.

The central bank also announced on Friday that the maximum interest rate for the period Sept. 28 to Oct. 4 for the one-month rupiah time-deposit which would be guaranteed by the government was 67 percent, while for U.S. dollar deposits it was 15 percent.

The interest rate ceiling for the rupiah time-deposit of three-month, six-month, 12-month, and 24-month are 61 percent, 50 percent, 48 percent, and 29 percent, respectively.

The maximum interest rate for the rupiah interbank money market was set at Rp 56 percent, while the limit rate for the U.S. dollar money market was 14 percent. (rei)