Rupiah should strengthen: Camdessus
Rupiah should strengthen: Camdessus
BRUSSELS (Reuters): The head of the International Monetary Fund said on Wednesday that the battered Indonesian rupiah should strengthen.
But he said that the recovery would take time.
The Indonesian currency has nose-dived despite last week's agreement with the IMF for sweeping economic reforms in return for a $43 billion bail-out package.
But, Camdessus said, "I think that over time the Indonesian program should lead to a strengthening of the rupiah as well as a strengthening of the economy in general."
According to him, Hong Kong and China looked able to escape the worst of Asia's financial crisis while their neighbors could overcome their troubles by 2000.
IMF managing director Michel Camdessus said Southeast Asian economies should even emerge stronger than before the turbulence as they would have addressed their most serious structural problems.
"A crisis which is first of all a major threat and a danger can become an opportunity for changing things so that the country emerges in a better state than before the crisis," Camdessus told the European Parliament's development committee.
Camdessus expressed confidence that both Hong Kong and China would succeed in resisting the financial turmoil that has swept the region.
He said he expected Asian currencies, which have plunged in value over the last six months, to recover from their lows to ensure that future growth was not purely driven by exports.
Turning to China, Camdessus said he had been reassured during recent talks with Chinese officials that Beijing would not go down the path of competitive devaluation.
"The Chinese are absolutely determined to resist that temptation."
On the problems of the region's biggest economy, Japan, Camdessus said he had been reassured by talks with Prime Minister Ryutaro Hashimoto that the country would announce steps to tackle its banking crisis very soon.
"(These measures) should put an end to the Japanese banking crisis and should make it possible for all these countries to get out of this crisis in a year or two years or three years, in any case by the end of the century."