News Brief: IMF Welcomes Indonesia’s Exchange Rate Action

August 14, 1997

IMF Welcomes Indonesia’s Exchange Rate Action

Stanley Fischer, Acting Managing Director of the International Monetary Fund, today made the following statement on the decision by the Indonesian authorities to allow the rupiah to float:

"Bank Indonesia has announced that, effective August 14, it has decided to abolish its exchange rate intervention band and allow the rupiah to float. The floating of the currency, which was done partly in response to turbulence in regional currency markets, was in line with Bank Indonesia’s steady progress toward greater exchange rate flexibility, particularly over the last two years. In present circumstances, a floating exchange rate will enhance the effectiveness of macroeconomic policies aimed at sustaining high rates of growth with financial stability.

"The management of the IMF welcomes the timely decision of the Indonesian authorities. The floating of the rupiah, in combination with Indonesia’s strong fundamentals, supported by prudent fiscal and monetary policies, will allow its economy to continue its impressive economic performance of the last several years."


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