Washington (Agencies) – The International Monetary Fund (IMF) on Friday approved a fresh loan worth US$469 million to Indonesia, bringing its total lending to about US$3.5 billion under the current US$5 billion loan program for the country.

The new loan will be provided as a result of the IMF board's endorsement Friday of the country's plan for new reforms. Indonesia submitted the plan to the IMF earlier this month,Dow Jones reported.

In approving the loan, First Deputy Managing Director Anne Krueger said in a statement: "Indonesia has continued to make good progress in implementing economic reforms under the program. Economic growth has been sustained, inflation has declined, the banking system has been strengthened, and asset recoveries have advanced." However, the deputy managing director called for the country's sustained efforts to proceed with reforms in order to regain the confidence of international investors.

In particular, Indonesia needs to buttress its financial system, she said. "Strengthening the financial sector is a central element of the program ... Further steps are required to strengthen monitoring, governance and accountability of state banks as they prepare for divestment," Krueger said.

The deputy managing director also noted that Indonesia must improve the legal and judicial system to attract more investment. "Further progress in implementing legal and judicial reforms is critical to strengthen governance and improve the investment climate," she said.

The IMF loan program, which conditions its disbursement on Indonesia's implementation of economic structural reforms, started in 2000 after the 1997-98 Asian financial crisis dealt a devastating blow to the country's economy.

Jakarta plans to refrain from renewing the program when it expires at the end of this year. But with international creditors unlikely to roll over their loans to Indonesia's public debt without some IMF involvement, people close to the talks say the IMF may remain in the country as an advisory body next year.