[Kabar-indonesia] Bank Indonesia: Remainder Of IMF Debt Repaid [+Eyes Ratings Upgrade]

[Joyo at aol.com]

also: Indonesia eyes ratings upgrade after IMF payback

Bank Indonesia: Remainder Of Outstanding IMF Debt Repaid

JAKARTA, October 12 (Dow Jones)--Bank Indonesia said Thursday that 
it had repaid the government's total outstanding debt to the
International Monetary Fund.

The central bank made an early repayment of the government's $3.18
billion outstanding debt to the multilateral lender on Thursday, a
Bank Indonesia statement said.

"The repayment of the IMF debt is a signal of the government's
increased confidence and fiscal flexibility," the statement said,
quoting Bank Indonesia Governor Burhanuddin Abdullah. [ 12-10-06
0926GMT ]

The repayment has been long-anticipated and won't impact local markets.

Abdullah told reporters last week that the repayment was imminent and
the IMF on Monday congratulated the Indonesian government for the
pending move.

"This repayment is expected to further increase investor confidence in
(Indonesia) and to be followed by increased (sovereign) ratings and
decreased country risk (ratings)," the central bank statement said,
citing Abdullah.

The repayment is the second and final installment after the government
made an initial advance repayment of about $3.7 billion in June.

The advance repayment is possible thanks to a rise in Indonesia's
foreign exchange reserves resulting from the high prices of export
commodities including gas, oil and crude palm oil.

The statement said Indonesia's foreign exchange reserves are likely to
be above $39 billion by the end of 2006 following the IMF repayment.

The reserves are at "a level sufficient to fund imports for more than
four months and pay installments on the government's loans granted by
other countries," the statement said.

Last week, Abdullah said Indonesia's foreign exchange reserves will
likely hit $43.3 billion by the end of the year, compared with $42.36
billion at the end of September.

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Indonesia eyes ratings upgrade after IMF payback

JAKARTA, October 12 (Reuters) - Indonesia hopes the early payment of
its remaining $3.2 billion debt to the International Monetary Fund
(IMF) will improve its sovereign credit ratings, which remain below
investment grade, the central bank said on Thursday.

The central bank, Bank Indonesia, also said that it has cleared its
debt to the IMF effective on Thursday. The loans were originally due
by 2010.

The bank had made the announcement that it had repaid the remaining
loans a week ago but needed a few days to wrap up administration to
make it effective.

"We hope that the settlement of this debt will increase investor
confidence in us and that we hope will be followed by a better rating
and a lowering in country risk," the central bank said in a statement.

The IMF led a multi-billion dollar loan package to help Indonesia
weather the Asian financial crisis of the late 1990s which hit the
country hard.

The central bank had forecast the country's foreign exchange reserves
would be $43 billion at the end of this year, against $42.35 billion
at the end of September.

The bank, however, said the $3.2 billion payment would cut the
year-end figure to around $39 billion, which it said was comfortable
enough to cover the country's import needs for more than four months
as well for foreign debt repayments.

Standard & Poor's in July raised Indonesia's long-term foreign
currency rating by one notch to 'BB-', still three notches below
investment grade, while the long-term local currency rating was raised
by one notch to 'BB+', one notch below investment grade.

The S&P upgrade was followed by one from Fitch, which also has
Indonesia's long-term foreign currency rating at 'BB-'. That leaves
only Moody's with a 'B1' rating, which is four notches below
investment grade.

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Joyo Indonesia News Service
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