Tokyo to monitor talks on IMF aid for RI

Tokyo to monitor talks on IMF aid for RI

TOKYO (AFP): Japanese Finance Minister Hiroshi Mitsuzuka said
yesterday Tokyo would monitor discussions on a possible IMF-led
international financial package for Indonesia as it wrestles with
currency woes.

"Japan will maintain close collaboration with the
International Monetary Fund (IMF) and the World Bank," Mitsuzuka
told a news conference, referring to Indonesia's move on
Wednesday to seek assistance the international bodies for its
economic program.

But Mitsuzuka declined to clarify his stance toward the
Indonesian move.

The Indonesian move put pressure on the stock price of
Mitsubishi Materials Corp. as it raised uncertainty over the
prospects for the company's seven billion dollar smelter project
in the country, analysts said.

Mitsubishi Materials closed down 38 yen at 290 yen on the
Tokyo Stock Exchange, a drop of 11.6 percent, after touching a
low of 285 yen.

"It is still uncertain how -- and if -- the (Indonesian)
government's move will affect long-term investment profitability,
although it may have some impact on near-term prospects,"
Yamaichi Research Institute analyst Hiroaki Kawabe said of
Mitsubishi Materials.

IMF managing director Michel Camdessus said Wednesday in
Washington that his organization would support Indonesia's
decision to put in place a new economic program in response to
declines in the Indonesian rupiah.

"The IMF strongly supports the approach that has been followed
by Indonesia, which sees this as an occasion to strengthen its
economic policies even if fundamentals are basically sound,"
Camdessus said in a statement.

Camdessus said two Fund teams would arrive in Jakarta this
week to begin discussions on an IMF-supported economic program
and to provide technical assistance for financial sector reform.

Indonesia's President Soeharto said Jakarta was sounding out
international agencies, including the IMF, as a "precautionary"
measure for long-term financial assistance.

The government also said it remained committed to support its
currency "to avoid excessive exchange rate volatility and
depreciation."

Despite a fall of over 45 percent in the rupiah against the
dollar since speculators attacked the currency in July, the
government pledged to consistently implement the free foreign
exchange system.