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Hatta confirms Indonesia to loan US1 billion to IMF

6th July 2012 | 3.127 Views
Hatta confirms Indonesia to loan US1 billion to IMF
Hatta Rajasa. (ANTARA)
Jakarta (ANTARA News) - Chief economic minister Hatta Rajasa has confirmed Indonesia would loan US$1 billion to the International Monetary Fund (IMF) as a contribution to the multilateral institution`s efforts to secure global economy.

"We are part of the global economy. If they are affected, so are we. Therefore, we must participate. If we stay idle we can also be affected," he said here on Friday.

He said it would be better if the loan would not only be distributed to the European region but also other regions such as Africa which also needs funds to push their economies.

"The IMF needs US$430 billion to be injected to the system to overcome financial difficulties but it is hoped the loan will not be used fully for Europe but should also be given to Africa and other poor countries in need," he said.

He said the loan would be one of the topics to be discussed by President Susilo Bambang Yudhoyono and IMF executive director Christine Lagarde during the latter`s visit here from July 8 to 10 July.

Finance Minister Agus Martowardojo had earlier said the government is still considering to give a loan to IMF to strengthen its capital.

"It (the loan) is now still being processed internally, which will be given to maintain the world`s economy so that it would not become worse and threaten overall conditions," he said.

He said the capital was needed by the IMF and it reflected Indonesia`s good conditions as well as commitment to safeguarding the global economy from the crisis in Europe.

He said the loan would not be taken from the budget but would be part of the country`s foreign exchange reserves.

"The loan we will give to the IMF will remain in the Indonesian balance sheet as part of its foreign exchange reserves recorded in the IMF," he said.

One of the results of the G20 Summit in Los Cabos, Mexico, recently is commitment from participating countries to support sufficient financial supply for IMF to carry out its global surveillance function.

For that G20 leaders agreed to fully support the agreement made by their financial ministers and central bank governors to give an additional operational fund of US$430 to the IMF collected based on bilateral arrangement between donors and the IMF.