RI will overcome crisis with IMF help: Soeharto
RI will overcome crisis with IMF help: Soeharto
KUALA LUMPUR (AFP): President Soeharto expressed confidence here yesterday that his country will overcome its economic crisis amid strong fundamentals and support from the international community.
"Indonesia has been badly hit by the currency crisis. We know and we are trying to overcome this," he said at a news conference after a three-day summit of the Group of Fifteen (G-15) developing nations.
In his first public comment on the US$38 billion bailout for Indonesia led by the International Monetary Fund (IMF), he said "we are convinced that we will be able to overcome this because based on the economic aspects, our fundamentals are still strong."
"We do have programs and we have invited the IMF to study these programs," he said, referring to the economic reforms launched by Jakarta to meet the expectations of its creditors, including the closure of 16 troubled banks and government financial belt-tightening.
"These programs have been agreed upon and the IMF along with the World Bank have given their support and then assisted us financially," he said.
He said the crisis was "a matter of confidence in our rupiah," noting the sharp decline in the currency's value in recent months and its rise after the IMF rescue plan was announced last weekend.
"The Indonesian crisis is actually now a matter of confidence in the rupiah and this is what we are trying to revive," he said, adding that the support his country had received "has been fruitful."
Meanwhile, a U.S. official said here yesterday that U.S. banking experts would provide assistance to Indonesia over financial reforms attached to the IMF economic bailout.
Experts from the Federal Reserve Bank and the Federal Deposit Insurance Corporation (FDIC) will be among officials helping Indonesia deal with its reforms, Timothy Geithner, U.S. assistant secretary for International Affairs said in Jakarta yesterday.
"Experts from the Fed and the FDIC will provide technical assistance as part of the World Bank and IMF team dealing with the financial system," he said.
The IMF announced its bailout package last week to help Indonesia out of a financial and banking crisis sparked by the regional currency meltdown that occurred after Thailand devalued the baht on July 2.
"In addition to this financial support through the international financial institutions, the U.S. authorities will play an important role in helping efforts by the Bank of Indonesia to strengthen the financial system," Geithner said at the end of a one-day visit.
"The markets have reacted quite favorably to the program so far, which is a testament to the speed, clarity and force with which the authorities have acted and the credibility of the authorities' commitment to a strong program, " he said.
He also said the United States participation "is a signal of the importance we attach to successful efforts here in Indonesia and in the region as a whole to restore financial stability."
The rupiah has fallen to as low as 3,870 to the U.S. dollar but was trading around 3,270 at midday Wednesday. It had closed at 3,260 on Tuesday, boosted by the IMF rescue plan and reforms undertaken by Jakarta.
Strong Malaysian trade surplus and hopes Thailand might be close to finding a new leader also pulled Southeast Asian currencies out of the doldrums yesterday.
In Malaysia, the ringgit jumped to highs of around 3.2650 to the dollar from around 3.3200 at midday after Finance Minister Anwar Ibrahim said Malaysia posted a 1.21 billion ringgit trade surplus in September.
In Thailand, the baht was at 38.90/39.05 to the dollar onshore at 1030 GMT against 39.46/66 six hours earlier and 38.65/38.80 late on Tuesday. Offshore baht was at 39.00/20 against 39.50/60 earlier.
Editorial -- Page 4
G-15 -- Page 10
Rupiah -- Page 11