Leigh Murray, Jakarta – Indonesia signed Wednesday the International Monetary Fund letter of intent that outlines key economic reform programs for the government to revamp the economy.

The letter was signed by Senior Economics Minister Kwik Kian Gie, Finance Minister Bambang Sudibyo and Bank Indonesia Governor Sjahril Sabirin. Kwik said the letter of intent was due to be signed at the end of May but Indonesia has already met the requirements demanded by the IMF.

"The signing of a letter of intent is a landmark in Indonesian- IMF relations," Kwik told reporter, "with the government and IMF agreeing to strengthen cooperation on the economic reform program." The signing of the letter of intent paves the way for the release of a $400 million loan installment early next month. The letter will now be sent to the IMF's executive board for review.

Indonesia has come under increasing pressure from the IMF to speed economic reforms in key bank and corporate areas as well as other sectors. The fund postponed the second disbursement of the $5 billion loan to Indonesia in early April due to the government's foot-dragging on a host of economic issues.

An IMF review team wound up its mission in Jakarta on May 3 and returned to brief the IMF's executive board on the state of Indonesia's reform efforts. IMF officials said at the time that if the board approves the government's new letter of intent to the IMF, the fund will release a $400 million loan to Indonesia in early June.

An IMF official said earlier Wednesday that the signing "means they have now fulfilled all the conditions for signing of the letter of intent, there's complete agreement." The IMF now says that Indonesia has made major efforts to speed economic reforms and is committed to implementing its restructuring program.