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.