Indonesia may be able to press ahead this year with its plan to fully repay its remaining debt to the International Monetary Fund (IMF) – a year earlier than scheduled – on the back of recently strengthening foreign exchange reserves, the central bank said Monday.

"If we have enough money, then we will repay it this year," Bank Indonesia Governor Burhanuddin Abdullah told reporters Monday. "If not, then we'll give it another six months and made the final payments then."

Burhanuddin's latest remarks are in line with those made by BI Senior Deputy Governor Miranda S. Goeltom in Malang last week, when she said that the repayment process would be completed this year.

In June, Indonesia repaid half of its remaining US$7.8 billion debt to the IMF, which it received in the form of standby loans as part of a multibillion dollar bailout package after the eruption of the regional financial crisis in the late 1990s.

Finance Minister Sri Mulyani Indrawati had earlier this year proposed accelerating the repayment of the debt to ease the increasing interest burden arising from it, with the government and the central bank finally agreeing to the repayment of the debt in two tranches.

Burhanuddin had said that a second payment could be made either in November or December this year, or in 2007, after the making of the first payment in June. The original schedule for the repayment of the total debt was December 2010.

The decision to fully repay the IMF debt will, however, still depend on the adequacy and sustainability of Indonesia's forex reserves, Burhanuddin said. He stated that the reserves must be sufficient to cover the cost of between 4.5 and 4.7 months of imports, and the interest payments on the government's foreign debts. "If (the reserves) are more than that, then we will be able to pay (this year)," he said.

Indonesia's forex reserves currently stand at US$44 billion, figures from the central bank show, which is enough to cover the cost of almost 5 months of imports and foreign debt interest payments. BI has also strengthened its reserves position through a number of swap agreements with other central banks in the region.

But BI still needs to exercise prudence in managing the reserves, which serve to support the rupiah, given the jitters affecting the rupiah recently in the wake of persistently rising oil prices and worries over the new crisis in the Middle East.