Yen drop no instant remedy for RI depts

Yen drop no instant remedy for RI depts

JAKARTA (JP): State Minister for National Development Planning
Ginandjar Kartasasmita said Tuesday the slight appreciation of
the U.S. dollar against the Japanese yen will have no immediate
impact on Indonesia's debt servicing burdens.

"The government has yet to calculate its impact. We are still
waiting for a further development of the two currencies," he told
journalists.

Ginandjar, also the chairman of the National Development
Planning Board, said the yen's downturn against the U.S. dollar
was temporary in nature so that it would be difficult to
calculate its impact on the country's foreign debt repayment.

Speaking to reporters in his office following the official
opening of a meeting hall, the minister said that he doubted the
yen's drop would continue.

The yen's value against the U.S. dollar has dropped to about
90 from 80 following the Japanese government's decision early
last week to ease regulations on overseas investments and foreign
loans.

The measure, partly aimed at reducing the foreign pressure
against the Japanese foreign trade surplus has also resulted in a
drop in the yen's value against other major world currencies.

Ginandjar described the Japanese government's monetary
package, which also encourages Japanese financial institutions to
provide loans to their overseas borrowers in non-yen currencies
as a positive instrument in helping developing countries.

"For Indonesia, the Japanese government's financial package is
very positive in efforts to diversify our foreign loans, which
are now mostly denominated in yen," he explained.

He acknowledged that the government could not immediately
benefit from Japan's new financial package because that country's
loan commitments to Indonesia for the 1995-1996 fiscal year were
made during the meeting of the Consultative Group for Indonesia
in Paris last month.

"But it is very positive because at least the private sector
could first benefit from the financial package," he said.

The World Bank-chaired Consultative Group for Indonesia
agreed in its recent meeting to provide financial aid of about
US$5.36 billion for the 1995-96 fiscal year, about US$2.14
billion of which was pledged, in yen, by the Japanese
government.(hen)