IMF gives Jakarta more leeway in rescue plan

0 Comments | Asian Political News, July 17, 2000

SINGAPORE, July 12 Kyodo

The International Monetary Fund (IMF) is adopting a more flexible approach toward Indonesia due to the volatile economic situation there, the Business Times newspaper reported Wednesday.

The report quoted sources in Jakarta as saying the IMF is now taking a more "relaxed" attitude toward Indonesia in terms of complying with the requirements for the release of funds under a rescue package for the country.

The report said the IMF feels it is no longer productive to impose any strict deadlines on Jakarta on the signing of the next letter of intent, earlier scheduled to be completed this month.

The reason for the softening of the IMF's stance is that President Abdurrahman Wahid is scheduled to appear before the People's Consultative Assembly to account for his first 10 months in office amid increasing displeasure with his government's management of the economy, the report said.

Escalating political and social tensions in Indonesia have caused the rupiah to fall below the 9,000 level against the U.S. dollar, and severely dampened the interest of foreign investors.