Indonesia Facing Currency Difficulties
Jakarta, already plagued with East Timor problems, is now watching its currency, the rupiah, slip to levels not seen since the end of April. John Howard reports.
The rupiah has been the worst performing currency in the past month, slipping 14.1 per cent. At 8,357 to the US dollar yesterday, it was the weakest since the middle of April. The rupiah recovered to stand at 8,250 to the dollar in late trade.
A combination of factors is dragging down the rupiah, from the scandal of missing funds at Bank Bali to the East Timor violence and international investors wary of committing funds to Indonesia.
There was little sign of an end to the bad news with the Asian Development Bank (ADB) now adding its voice to the chorus of international disapproval over missing funds a Bank Bali.
The ADB said it might halt $US 125 million in loans due for disbursement this year to Indonesia if an investigation into the affair proved unsatisfactory.
The IMF and World Bank have already indicated further loan payments to the country hinged on a satisfactory resolution of the case.
But Indonesia's troubles showed signs of spreading with the Singapore dollar taking a knock from the rupiah's weakness.
The South Korean won declined for the fifith day on the back of financial troubles at the Hyundai and Daewoo groups.
Clearly, there are serious problems in our backyard which could soon spill over to other Asian currencies. It would not be unreasonable to describe it as a powder-keg.
There remains wide-spread anger throughout the Asian nations when London and New York hedge funds were let loose on them raping Thailand, Indonesia and South Korea, and then turning the shiverieng survivors over to the IMF system, not to help the victims, but to ensure no Western bank was stuck with non-performing loans.
In conferences and seminars throughout Asia the consensus was that the IMF policy in Asia has been a disaster with so-called globalisation being discredited as a crooked financiers scam.
Batten down the hatches!!!!