Washington – The International Monetary Fund sought Friday to reassure financial markets that it wasn't turning away from engagement with Indonesia, following speculation in Indonesia that a meeting this week between Fund officials and Economy Minister Rizal Ramli damaged relations further.

Rizal met with IMF First Deputy Managing Director Stanley Fischer Wednesday, but after two hours the IMF would only confirm that the two met, demurring from providing any further details.

Indonesian officials told reporters the meeting was positive and that they were nearing an agreement with the IMF on the payment of a stalled $400-million loan installment, but Indonesian press reports pointed to the silence at the IMF as a sign negotiations had gone poorly.

An IMF spokesman said Friday that, because of the intense media speculation in Indonesia, the IMF wanted to issue a statement on the meeting between Rizal and Fischer.

"They discussed issues relevant to the IMF-supported program in Indonesia," the spokesman said. "The meeting was productive and the two sides agreed to intensify discussions and remain in touch in the coming days."

There is still no hint as yet as to when an IMF staff mission might travel to Jakarta to conclude negotiations with the government on the delayed loan installment, which was to have been paid by the IMF last December.

However, the money has been held back by IMF concerns that the government is about to implement a law weakening the independence of the Indonesian central bank. The Fund also wants the government to curb the borrowing powers of the provincial governments to ensure fiscal discipline is maintained throughout the loan program.