$1 billion augmentation: IMF augments support for Indonesia, approves release of new credits

• Pages: 98

Page 98

"The IMF's Executive

Board approved the completion of the fourth review [see News Brief No. 98/31, IMF Survey, August 31,1998, page 269], augmentation of the program by SDR 714 million (about $1 billion), and release of the next SDR 337 million (about $460 million) credit tranche. Including this release, total purchases by Indonesia since the onset of the Asian crisis will amount to SDR 6.8 billion (about $9.3 billion), with a further SDR 2.2 billion (about $3 billion) available in the period to November 2000," Fischer said.

Policy implementation has continued to be satisfactory since the last review was completed in December 1998, and the major macroeconomic targets under the program for 1998/99 have been met. Monetary policy has remained firm, while fiscal policy has started to provide the intended stimulus to the economy, primarily through increased spending on the social safety net.

However, market sentiment remains fragile, partly reflecting political uncertainties and civil unrest.

Important progress has recently been made in advancing bank restructuring, which is crucial to the eventual recovery of the economy. A major program of private bank recapitalization and closures was announced on March 13 and is being implemented smoothly. Steps have been...