Rupiah rate set at 11,216 against dollar

Rupiah rate set at 11,216 against dollar

JAKARTA (JP): The Indonesian Debt Restructuring Agency (INDRA) set on Thursday the U.S. dollar exchange rate used to convert domestic corporate debt into rupiah at 11,216 for companies joining the agency in October.

INDRA chairman Sumitro said the rate was based on the moving average market rate during 20 working days in September and monthly inflation rate in that month of 3.75 percent.

October's exchange rate fell from 12,314 in September and 13,233 in August, in line with the rupiah's continuing appreciation against the dollar.

On Thursday, the rupiah traded at below 9,000 against the dollar before closing at 9,100.

INDRA's conversion rate is expected to improve over time and is guaranteed not to get worse.

Sumitro said the agency would announce the monthly exchange rate on the eighth of each month until June 1999, when it would close its doors to the debt restructuring plan.

INDRA was established by the government in August as an alternative to help Indonesian companies settle their US$64 billion in foreign debts.

Debtors joining INDRA's plan first have to seek approval from their lenders to reschedule the debts in eight years, including a three-year grace period.

Companies joining the plan pay their dollar-denominated debts in rupiah to the agency, which then pay the debts, in dollars, to international creditors.

The debt restructuring program is expected to help reduce demand for dollars, which in turn will help strengthen the ailing rupiah.

INDRA did not announce whether there had been any participation in the debt program as of Thursday. As of early last month, however, no single company had joined INDRA's program. (rid)