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March 5, 2009

Indonesia secures $5.5bn in standby loan

Indonesia on Wednesday received $5.5 billion standby loan from international lenders, which can be used if the country fails in obtaining funds from domestic and global market, Finance Minister Sri Mulyani said Wednesday.

Of the total funds, the World Bank will contribute $2 billion, Japan $1.5 billion, Australia $1 billion and the Asian Development Bank $1 billion, the minister said.

"The loan facilities is an important precautionary step, which we have designed to maintain the confidence of investors in overseas and domestic markets," she said during the signing of the commitment at her office here.

Indonesia, Southeast Asia largest economy, has been raising funds by selling debts to local and international markets as an effort to plug its widening budget deficit in which most of it would be used to finance massive infrastructure projects to create job and spur growth.

The government and the parliament have approved 73.3 trillion rupiah (some $6.1 billion) fiscal stimulus package recently.

The country's budget deficit has been expanded to 2.6 percent of the GDP to some 137 trillion rupiah (some $11.7 billion) from previous target of 2.5 percent of the GDP for this year, as an effort to cushion the impact of the global recession.

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