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Soeharto puzzled by rupiah fall

Source
Jakarta Post - December 18, 1997

Jakarta – President Soeharto found it extremely difficult to understand why the rupiah had continued to fall against the U.S. dollar, a senior minister said yesterday.

The President therefore ordered economic officials, assigned to handle the monetary upheaval, to closely monitor the situation and keep him posted of the latest developments, Minister/State Secretary Moerdiono added.

"The Monetary Council and the President himself have found it extremely difficult to understand why the rupiah dropped to such a low level," Moerdiono said after meeting with Soeharto at his residence on Jl. Cendana Central Jakarta.

Asked about the government's measures to cope with the financial chaos, Moerdiono said: "I think it's an important time for introspection. We do not need to blame one another but the government will do its best to overcome the currency crisis. We try to give people results, not just promises."

The rupiah fell to a historic low of 5 980 to the dollar on Tuesday, but has since recovered to about 5,500 yesterday. Despite mounting pressure, Moerdiono reaffirmed the government's position that Indonesia would not reschedule its foreign debt.

"We never think about a rescheduling Indonesia will try as hard as it can to fulfill its obligations," he said.

Minister of Finance Mar'ie Muhammad had said earlier that the country's foreign debt totaled US$117 billion as of September, including $65 billion owed by the private sector.

The state secretary rejected allegations from some analysts that the International Monetary Fund's (IMF) prescription had failed to cure the country's ailing economy.

"Indonesia sought help from the IMF, and it fully supports our programs... Other countries are also facing similar problems like us... This is a great turmoil and we need some time to solve the problem," Moerdiono said.

Soeharto also summoned State Minister of National Development Planning Ginandjar Kartasasmita and Minister of Industry and Trade Tunky Ariwibowo to his residence yesterday.

Soeharto ordered Ginandjar last week to intensify relief operations to drought-hit regencies in Irian Jaya. He was also ordered to provide labor-intensive projects in big cities, including Jakarta and Surabaya, to employ laborers.

Trade surplus

Tunky said after the meeting that Indonesia enjoyed an international trade surplus of $7.7 billion in the first three quarters of this year, resulting from total exports of $39.5 billion, compared to imports of $31.8 billion.

The exports represented a 9 percent increase over the same period last year and imports were down 0.5 percent.

"Our non-oil and gas exports totaled $30.8 billion, or 10.3 percent higher than last year ... while non-oil and gas imports were about $28.8 billion or 2 percent less," Tunky added.

Tunky said the country's imports declined due to the impact of the financial crisis and the rupiah's sharp depreciation against dollar.

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