Jakarta – The International Monetary Fund (IMF) has completed its 10th review of Indonesia's performance under a 5.2 billion-dollar extended fund facility arrangement and approved the release of a further US$493 million loan.

The new disbursement will increase the total amount drawn under the arrangement to US$4.7 billion, the Washington-based organization said in a statement released Wednesday.

"Indonesia's economic performance has continued to evolve favorably under the Fund-supported program, with a sustained economic recovery, a continued easing of inflation, and a further increase in external reserves," said Anne Krueger, IMF First deputy managing director and acting chairwoman.

"These favorable developments have bolstered financial market sentent toward Indonesia, and have further reduced the economy's vulnerability to external shocks," she said in the statement.

Krueger said Indonesia's fiscal policy was on track, with the budget deficit through the first half of the year well within the 2003 mid-year target. The government's 2004 budget proposal represents a further welcome step toward fiscal consolidation. To enhance Indonesia's tax base, the government is pressing ahead with efforts to strengthen tax and customs administration.