Jakarta – The following is a chronology of Indonesia's financial crisis and political developments in the country the last eight months.
1997
July 8 - The rupiah starts to crumble. Jakarta widens its rupiah trading band to 12 from eight percent.
July 24 - Asian currency meltdown. The rupiah, baht, ringgit and peso all slump as confidence in the region fades.
August 14 - Jakarta abolishes managed exchange rate system. The rupiah sinks further.
October 6 - Rupiah hits a low of 3,845.
October 8 - Indonesia says it will ask the International Monetary Fund for financial assistance.
October 31 - Indonesia's IMF package unveiled. It provides more than $40 billion in aid, although front-line defence is $23 billion.
November 5 - IMF approves a $10-billion loan for Indonesia as part of the international package.
1998
January 6 - Indonesia unveils its 1998/99 budget projecting 32.1 percent growth in revenue and expenditure over current budget and four-percent economic growth. The rupiah loses half its value against the dollar over five days, breaking through the 10,000 level before a slight recovery, on perceptions the budget would not meet IMF-mandated austerity measures and rumours Jakarta might declare a debt moratorium.
January 10 - Indonesia's President Suharto, under increasing international pressure to adhere to IMF conditions, announces the delay or review of 15 infrastructure projects.
January 11 - IMF first Deputy Managing Director Stanley Fischer in Jakarta for talks on the IMF's programme and how to proceed with it.
January 14 - IMF Managing Director Michel Camdessus says in Jakarta the IMF is asking Indonesia to sign a new letter of intent committing itself to implementing further reforms.
January 15 - Camdessus and Suharto sign an agreement strengthening economic reforms.
January 16 - Camdessus says he expects Indonesian and Thai economies to recover within two years.
January 21 - The rupiah falls to a record low of 12,000 to the dollar as reports surface that corporates now paying dollar debts in rupiah.
January 22 - The rupiah collapses a week after the IMF package shows no signs of easing Indonesia's debt and confidence crisis, hitting a record low of 17,000 amid economic pessimism and hints Research and Technology Minister Jusuf Habibie may be the preferred vice-presidential candidate. Bank Indonesia intervenes and currency recovers to 11,800.
January 23 - Indonesia presents a revised budget sticking to IMF-agreed figures. The budget expects zero growth in fiscal 1998 and 20 percent inflation, but assumes the rupiah will be at 5,000 to the dollar. It ends the day at 12,000.
January 27 - Indonesia announces a temporary freeze on debt servicing but says it is not a moratorium as companies with dollars can pay creditors. It also announces banking reforms in which the government will guarantee the security of both depositors and creditors.
January 28 - Indonesia again stresses it has not sought a debt moratorium, saying a temporary freeze suggested on servicing corporate debts is voluntary. Mobs attack shops owned by ethnic Chinese in Central Java over rising food prices.
February 3 - Singapore proposes a multilateral system of guarantees for Indonesian letters of credit.
February 4 - Indonesian government gives a lukewarm response to a proposal by U.S. economist Steve Hanke to set up a currency board, where the rupiah is pegged to another currency. Suharto refuses to name a running mate in March election, saying this was the right of parliamentary groups.
February 6 - Thousands of troops and police in show of strength in practice sessions in Jakarta before the indirect presidential elections. Chief debt negotiator Radius Prawiro says Indonesia's total foreign debt is $137.424 billion.
February 9 - Growing unhappiness over Suharto's handling of the economic crisis leads to a signature campaign to replace him. Suharto says he will announce new steps on the rupiah exchange rate, the first hint a fixed currency system might be implemented. Curfew is imposed in an eastern Indonesian town after more riots.
February 10 - Bank Indonesia Governor Soedradjad Djiwandono tells parliament the government is weighing the merits of a currency board system.
February 11 - Finance Minister Mar'ie Muhammad says the government is preparing for a currency board system. The rupiah rises to 7,200 to the dollar. Suharto accuses unnamed parties of seeking to undermine the economy by driving the rupiah down. Police detain 140 people after protests in Jakarta over rising food prices.
February 12 - The ruling Golkar party names Habibie and parliamentary speaker Harmoko as its vice presidential candidates.
February 13 - Suharto tells President Clinton the IMF is failing to stem Indonesia's financial crisis. Clinton objects to Jakarta's plans to fix the rupiah to the U.S. dollar through a currency board system. The rupiah surges as high as 8,100 on signs the plan will proceed.
February 14 - The IMF threatens to halt the bail-out fund over Indonesia's plans to peg the rupiah. ASEAN central bankers discuss a proposal to use regional currencies for intra-regional trade. Police detain 154 people in riots over rising prices that leave at least three dead, and Jakarta bans mass rallies during voting in March. Rioters torch shops owned by ethnic Chinese, churches and cars in three west Java towns. Two rioters are shot dead in Praya town on Lombok island.
February 16 - Indonesian police warn they would shoot rioters on sight even as new military commander Wiranto played down the impact of the violence.
February 17 - President Suharto fires central bank governor Soedradjad Djiwandono for opposing the currency board proposal. Djiwandono is replaced by U.S.-trained economist Sjahril Sabirin. The sacking draws immediate attacks from global lenders as it is seen as a direct affront to their demands that Jakarta reform its economy.
February 18 - Habibie assured of the vice presidency after winning the backing of the powerful armed forces. German Finance Minister Theo Waigel signs agreements to provide Indonesia with 375 million marks ($205.3 million) in financial aid to fight the economic crisis. Thousands of students and labourers, angered by rising prices, stone dozens of shops and offices in the southeast Sulawesi capital.
February 19 - U.S. Commerce Secretary William Daley and German Finance Minister Waigel insist Indonesia must follow IMF-prescribed economic reforms to get economy on track. Chinese shopowners open a public relations drive in Java selling commodities at discounts to Javanese poor. Singapore says it would make US$2 billion available if its plan for international guarantees for Indonesian letters of credit is implemented. The IMF and United States, while stressing that the currency board scheme was premature, show flexibility by saying that the currency plan could be considered once banking reform, corporate debt and other economic issues had been addressed by Jakarta.
February 20 - Finance Minister Mar'ie Muhammad says Indonesia so far faced no problem in meeting state foreign debts, while telling parliament that the government wants to maintain good ties with the IMF. Mar'ie says Suharto had instructed the finance ministry and the Central Bank to prepare for the introduction of a currency board by taking into consideration all views and development, locally and abroad.
February 26 - Indonesian companies hold their first formal meeting with a steering committee of lenders to find ways to resolve the country's $74 billion in private debt.
March 3 - U.S. special envoy Walter Mondale meets with Suharto, said by U.S. officials to be carrying a "blunt" message from President Clinton.
March 6 - IMF delays disbursement of second $3 billion tranche to Indonesia due on March 15, saying they will not discuss Indonesia's reform programme before April.
March 10 - Suharto re-elected President for a seventh five-year term by the 1,000 member People's Consultative Assembly (MPR), as thousands of students held protest rallies against the election.
March 11 - Suharto is sworn in. Habibie is elected vice-president. Markets are unmoved.
March 14 - Japanese prime minister Ryutaro Hashimoto arrives in Jakarta for talks with Suharto, the first G7 leader to do so.
March 16 - Suharto swears in 36 new cabinet ministers, including his daughter Siti Hardiyanti Rukmana and an old golfing buddy, as students and riot police clash at the National University in Jakarta.
March 18 - Indonesia's new top economic minister Ginandjar Kartasasmita meets with IMF Asia-Pacific head Hubert Neiss in a bid to review the country's reform process and get the delayed disbursement of $3 billion in aid back on track.
March 20 - Indonesia says decision has been made to drop for the time being the idea of implementing a currency board system. The government will however still look for a means to stabilise the battered rupiah. Government proposes a five percent tax on foreign currency purchases. This idea was subsequently shelved.
March 24 - Indonesia consults Mexican officials on the "Ficorca" plan Mexico used to ease its debt crisis in 1983, sources said.
March 26 - The Jakarta post reports that unemployment has risen to about 8.7 million people, or 10 percent of the workforce.
March 27 - Indonesia proposes to the IMF a formula to resolve its huge private debt, drawing on the Ficorca model.
March 30 - Indonesia agrees to privatise 12 state-owned firms under the new reform agenda under discussion with the IMF.
March 31 - Indonesia's decision to freeze the minimum wage at 1997 levels is seen as effectively halving the real income of Indonesia's urban poor, due to 50 percent inflation expected in 1998.
April 2 - The IMF and Indonesia agree on new figures for the fiscal 1998/99 budget, including a decline of 5 percent in GDP, inflation rate of 45 percent and a budget deficit of 3.5 percent. The IMF warns Suharto to show his commitment on tough reforms or lose IMF support. IMF agrees to a gradual phasing-out of commodity subsidies in consideration of the increasingly troubled plight of poorer Indonesians.
April 3 - Singapore announces it will provide $3 billion in a bilateral trade finance scheme to enable Jakarta to pay for imports from Singapore.
April 4 - The government suspends the licences of seven banks under a bank reform scheme widely applauded by the IMF and the international financial community. Seven other banks were placed under the supervision of the Indonesian Bank Restructuring Agency. A few of Suharto's relatives and friends are known to control, or hold large equity stakes in, some of the banks.
April 6 - Finance Minster Faud Bawazier says the government will set up two state companies to handle the assets of liquidated banks and insure depositors. April 7 - A committee of international bankers plan a meeting in New York later in April to discuss details of Indonesia's private debt restructuring. The meeting is to be attended by officials from the Indonesian central bank and the IMF. The Export-Import Bank of Japan will extend $1 billion of an expected $3 billion loan to Jakarta. The loan will go to a trade-linked finance guarantee system, to aid in facilitating trade.
April 8 - Talks between Indonesia and the IMF are concluded. The IMF says a new agreement on economic reforms will be closely monitored and frequently reviewed to ensure Indonesia complies with its terms. Further loan disbursements are conditional on Indonesia's "substantive action" on reforms. Indonesia revises its fiscal 1998/99 (April 1) economic growth expectation to minus four percent and its expected budget deficit to 3.2 percent of GDP. it also forecasts inflation for the fiscal year of 17 percent. Indonesia also announces a gradual easing of subsidies on most commodities and the floating of seven state-owned companies. The government will also assist private firms in paying debt, and abolish the granting of monopoly privileges in basic commodities. Japan says it will extend $2 billion in loans to Jakarta, out of $5 billion promised as part of the original IMF rescue package.