RI may need IMF help: Sanwa Bank

RI may need IMF help: Sanwa Bank

TOKYO (AFP): Indonesia might be forced to seek financial help from the International Monetary Fund (IMF) if it fails to meet billions of dollars in short-term obligations, a Japanese bank official said yesterday.

Jakarta might have to turn to the IMF if it fails to conclude the "roll-over requirement for repaying foreign denominated debt of $1.5-20 billion a month," said Takashi Miura, manager of Sanwa Bank Ltd.'s Singapore branch, who was speaking to a seminar here.

Miura said Indonesia may be the next major victim of southeast Asia's currency crisis which saw the Indonesian rupiah and several other regional currencies lose massive value against the U.S. dollar after the effective devaluation of the Thai baht on July 2.

Thailand has already accepted a US$17.2 billion IMF bailout that imposes strict requirements on its economy.

"Some arbitrage trading among weak currencies is becoming active" in the Asian foreign exchange markets, Miura said. "And dealers are now selling the rupiah to buy back the baht," he said.

Miura added the tightening of monetary policy was also expected to have a negative impact on the financial health of Indonesian firms and the rupiah might fall further to around 4,000 to the dollar in the near term.

The rupiah has fallen about 33.4 percent to 3,650 per dollar since May.

Miura also said the Malaysian ringgit was likely to come under further selling pressure against the dollar on growing concerns over Malaysian Prime Minister Mahathir Mohamad's macroeconomic policy management.

He forecast that the ringgit would fall to about 3.7 to the dollar in the near-term, after falling 24 percent in the past 5 months.