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IMF OKs Extra $1.3B for Indonesia

July 16, 1998

WASHINGTON (AP _ The International Monetary Fund has approved a $1.3 billion increase in an existing standby credit line for Indonesia and announced that more than $6 billion from various official sources will be available by the end of next March.

An IMF statement issued Wednesday added that $1 billion from the now $11-billion standby credit arrangement is available to Indonesia immediately, which brings total fund disbursement to about $4.9 billion.

According to the IMF, Australia, China, the Asian Development Bank and the World Bank will provide the added funding to Indonesia.

``New financing for the program is also to be provided through an informal arrangement among bilateral creditors that involves the rescheduling of principal payments falling due or the provision of an equivalent amount of new money,″ acting Managing Director Alassane Ouattara said.

He did not elaborate on details of the official debt relief. Indonesia’s donor countries have been scheduled to meet in Paris to review a host of assistance issues, including the idea of rescheduling official debts.

Outtara’s statement noted that the added IMF-linked funding announced Wednesday ``comes on top of substantial external financing previously committed by multilateral institutions, and by Japan and other bilateral donors″ as part of what had been touted as a $43 billion financial bailout.

The IMF’s executive board, which discussed Indonesia throughout the day Wednesday, apparently waited until late in the day for firm commitments on the bilateral contributions before releasing the latest credit tranche. Ouattara said the board commended Indonesia for implementing positive policies ``in very difficult circumstances.″

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