Canberra – International Monetary Fund Director for Asia-Pacific Hubert Neiss Wednesday said the fund is examining ways to preserve subsidies for food, rice and cooking oil in Indonesia under its assistance package.

When asked in a television interview from Washington whether the IMF is considering delaying the removal of subsidies on some items in Indonesia, Neiss said, "Yes we are studying ways and means to preserve those subsidies that benefit the very poor sections of society. "Basically, subsidies for food, for rice, for cooking oil," he said.

Indonesia has agreed to a $43 billion financial assistance package that requires it to meet a series of economic and financial system criteria. Falls in the value of the rupiah, spiraling inflation and food riots in the country have prompted calls from some countries, including Australia, to a softening in the IMF's hardline policy stance.

When asked about the IMF's flexibility in its approach to Asian economies that are receiving assistance from the Fund, Neiss said, "IMF programs are never rigid, they are applied flexibly in all Asian-crisis countries."

He added, "for instance, we have just agreed for more expansionary fiscal policy both in South Korea and in Thailand to make allowance for a larger economic decline that was originally foreseen, and for a larger need to support the unemployed."