Indonesia - No way around an external liquidity crisis

Indonesia''s continued spat with the IMF and doubts about its economic policy formation are jeopardizing its access to foreign capital.

Reduced access to foreign capital

Indonesias access to overseas capital is being steadily reduced question marks over the efficacy of economic policy formation are souring the appetite for private sector foreign investment in Indonesia relations between Jakarta and the IMF have cooled once more, as the Fund delays the latest $400 million loan until some of its concerns over monetary management have been addressed.

The IMFs concerns, and in part the reticence of foreign investors, reflect the long, drawn-out saga of President Wahids battle with the central bank. He wants to curb the independence of the institution and replace the board and the governor. The battle for control of Bank Indonesia...

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