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."