Southeast Asia

Aug 31, 2005

Bank Indonesia to sign swap deal with Japan

JAKARTA - Bank Indonesia Governor Burhanuddin Abdullah said here on Monday that he will go to Tokyo on Tuesday to sign a swap arrangement worth US$6 billion with the Bank of Japan. Burhanuddin said the arrangement is part of the Chiang Mai initiatives signed by members of the Association of Southeast Asian Nations (ASEAN) plus three - Japan, China and South Korea.

He further said the loan commitment of the Japanese central bank would only be used if Indonesia`s foreign exchange reserves had

been depleted. "We can use it in time of need," he added. Besides with the Bank of Japan, the Indonesian central bank has similar arrangements with South Korea and China, scheduled for signing this year.

The swap arrangements with the three countries are the second layer of Bank Indonesia's defence in safeguarding the rupiah exchange rate. "The first layer of defence is our foreign exchange reserves. We have to use a swap arrangement if it failed. We have to return to the IMF if the second layer also failed. But everybody does not like the third," Burhanuddin said. The Indonesian foreign exchange reserves continue to drop from US$37 billion early in 2005 to US$32 billion now, caused by the drop of the country's balance of payment surplus.

(Asia Pulse/Antara)

Bangkok Hotels

Phuket Hotels

Pattaya Hotels

Samui Hotels

Bali Hotels

Kuala Lumpur Hotels

Head Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong Kong
Thailand Bureau: 11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110