June 22, 1999
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| June 22, 1999 | atimes.com | |
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| Southeast Asia IMF wants Indonesia to maintain flexible forex rate JAKARTA - The International Monetary Fund (IMF) has expressed the hope that the future Indonesian government will retain the current flexible exchange rate system, saying the system has shown encouraging results. ''The flexible rate has been working well, and thus the IMF hopes that the system will be retained,'' IMF First Deputy Managing Director Stanley Fischer told newsmen after his three-hour meeting with President B.J. Habibie here at the weekend. The topic of a flexible exchange rate system was raised by the press to Fischer since economists of the Indonesian Democratic Party-Struggle (PDI-Perjuangan) have disclosed the possibility of applying such a system if they rule the country. Fischer also said that he will raise the issue of Indonesia's current flexible exchange rate system in a meeting with PDI-Perjuangan research and development chairman Kwik Kian Gie, who has suggested the rate should be fixed. The flexible rate, Fischer said, has been working very well. ''The pre-conditions for having a fixed exchange rate are very demanding, but we will have to discuss with Mr. Kwik and with others how they see the situation, and what exchange rate system would be best for Indonesia,'' he said. He also said the sharp rise in the Jakarta stock market may indicate a return of confidence in the economy, though in dollar terms the market remains ''way below'' its value before the crisis. Asked whether the economy is bottoming out, he said: ''It is what the data say. There is growth in the first quarter [and] inflation is essentially moving down [to] zero." ''In many countries, when stabilization takes place after a period of disruption, the first money that comes back is from the nationals of the country. Then the foreign capital comes in,'' he said. Fischer also said the IMF expected to be able to work with a new government. ''We will work together with the new government, and if it wants to continue with policies that we can support, we will support them. And I expect we will,'' Fischer said after the meeting which was also attended by IMF Asia-Pacific director Hubert Neiss. However, he said he believed Indonesia's new government will continue with the IMF program ''because the program is good for Indonesia." (Asia Pulse/Antara) | |||||||||
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