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)