Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Caussa Capital (formerly Antares) T.CAU -- Ignore unavailable to you. Want to Upgrade?

To: bill718 who wrote (2209)	1/11/1998 1:41:00 PM
From: bill718	Respond to of 4718

I believe the following article to be a very positive sign that the situation in Indonesia will improve by March: FOCUS-Fate of Indonesia markets in IMF, US hands Sunday January 11, 5:05 am Eastern Time By Mantik Kusjanto JAKARTA, Jan 11 (Reuters) - Indonesian financial markets face their toughest test ever this week as sceptical foreign investors seek a clear indication that the government of President Suharto is committed to economic reforms. The fate of the markets rests with the United States and the international Monetary Fund, which are sending senior officials here to ensure the reforms are followed through and bring Indonesia back from the brink of economic chaos, dealers and analysts said. Currency dealers said the outcome of talks between an IMF delegation now in Jakarta and a U.S. team likely to arrive on Monday would dictate the short-term trend in the rupiah, which plunged to an all-time low of 11,000 to the dollar last week. It recovered in weekend trading to around 9,600. The currency was around 2,400 just six months ago. ''We hope the arrival of these high-ranking officials will inject fresh confidence in the government and in the rupiah,'' one chief treasurer with a local bank said. ''The shock of the plunge in the rupiah has sent world markets reeling, including Wall Street. The depth of the crisis has alarmed the United States. We need external assistance to revive confidence in the rupiah,'' he said. But a senior Asian diplomat said much would hinge on what the officials said about Indonesia's economic reforms after their meetings. ''If they come out of the meetings to say they are convinced Indonesia is fully committed to reform, it would have a positive effect,'' the diplomat said. The visitors were expected to insist Suharto's government demonstrate it was not backsliding on commitments made to the IMF in return for a $43 billion bail-out plan in October. IMF First Deputy Managing Director Stanley Fischer arrived in Jakarta on Sunday and Michel Camdessus, managing director of the Fund, was expected on Wednesday. U.S. President Bill Clinton has sent Deputy Treasury Secretary Lawrence Summers to the region this weekend. He should arrive in Jakarta on Monday. Whatever sentiment prevails on the rupiah would impact on the stock market, where the composite index fell just over 16 percent last week to end at 343 points, brokers said. But the chief treasurer said fresh questions over President Suharto's political future had added another perplexing dimension to what was previously a monetary crisis. Indonesia's best-known opposition leader Megawati Sukarnoputri called on Saturday for Suharto to quit at the end of his term in March. It is the strongest public challenge the 76-year-old leader has received in his 32 years in power. President Clinton underscored the seriousness with which the world views Indonesia's crisis with a call to Suharto on Friday asking him to ensure the IMF reform programme was followed. According to newspaper reports, the IMF wanted a surplus of one percent of gross domestic product in the 1998/99 budget. But the budget announced by Suharto last Tuesday was balanced at 133.49 trillion rupiah, an increase of 32.1 percent in revenues and expenditures. Suharto agreed with Clinton's assessment and appeared to react swiftly. On Saturday he announced the delay or review of 15 major infrastructure projects worth billions of dollars. Significantly, his close associates and children are associated with most of the projects, and it appeared to be an attempt to deflect criticism that cronyism had weakened implementation of reforms. ''This should be very positive for the markets,'' the diplomat said. But the chief treasurer said the crisis seemed to have taken on a complex scope which could not be resolved easily by token gestures. ''I think the markets will wait for the outcome,'' he said, referring to the review of the reform programme by the IMF.