News Brief: IMF Completes Review and Approves US$940 Million Credit Tranche for Indonesia
November 6, 1998
IMF Completes Review and Approves US$960 Million Credit Tranche for Indonesia
Michel Camdessus, Managing Director of the International Monetary Fund, said: " I am pleased to announce that in support of the Indonesian government’s economic program, the IMF’s Executive Board today approved the completion of the second review under the Extended Fund Facility1 (EFF) and the release of the next SDR 684.3 million (about US$960 million) credit tranche for Indonesia. Due to good policy implementation, the Indonesian economy is showing welcome signs of stabilization. The rupiah has strengthened considerably over the last month, notwithstanding some slippage in recent days. The steep fall in output is showing signs of bottoming out. Inflation has slowed sharply, with the price level declining in October, as a result of improvements in the food situation and the strengthening of the rupiah. It is also welcome that interest rates have begun to decline."
Camdessus emphasized that the Indonesian authorities need to continue to make rapid progress in several key structural areas, particularly in domestic banking and corporate debt restructuring. "Together with consolidation of the progress in stabilization, these reforms will create the basis for a sustained recovery of output. "
1 See News Brief No. 98/31 of August 25, 1998. The EFF, for SDR 4.67 billion (311.8 percent of quota), replaced the three-year stand-by credit approved by the IMF on November 5, 1997 and covers its remaining 24-month period through November 2000.