Jakarta asks US for currency swap
By John Aglionby in Jakarta
Published: February 18 2009 17:04 | Last updated: February 18 2009 17:04
Indonesia on Wednesday asked the visiting Hillary Clinton, US secretary of
state, for a currency swap facility and budgetary contingency funding to
bolster the ailing rupiah and the country's broader economy in the face of the
global financial crisis.
Officials said the requests came with the suggestion that, without US financial
support, Indonesia might not be able to continue to be the beacon of thriving
"Islam, modernity and democracy" that Mrs Clinton has been trumpeting on her
Indonesia is already seeking to extend its $6bn (?4.7bn, £4.2bn) currency swap
arrangement with Japan and has similar deals, each worth $3bn, with China and
Its foreign reserves were $51bn at the end of January, down more than 10 per
cent in three months. The rupiah has weakened more than 8 per cent this year,
greater than any other regional currency apart from South Korea's won.
Washington already has currency swap arrangements with Singapore and South
Hassan Wirajuda, Indonesia's foreign minister, told Mrs Clinton that Japan,
Australia, the World Bank and the Asian Development Bank had agreed to standby
loans of $5bn.
Teukeu Faizasyah, Mr Wirajuda's spokesman, said: "The minister said it would be
in the interests of the US to provide similar assistance.
"The request was made in the broader context of the global financial crisis and
Indonesia as a democratic country. It will be quite hard for Indonesia to share
the message of democracy if it is not able to continue to maintain its
Mr Wirajuda did not put any figures on the requests and Mrs Clinton was
reported as saying she would discuss the proposals in Washington.
She, in return, put pressure on Indonesia to meet its responsibilities as a
member of the G20, saying at a press conference: "We have an obligation to help
restore global growth and economic prosperity."
Indonesia's G20 partners have accused it of creeping protectionism. Susilo
Bambang Yudhoyono, Indonesia's president, is one of the few leaders yet to
confirm his participation at the G20 summit in London in April.
Mrs Clinton is in Indonesia as part of her maiden overseas tour that also takes
in Japan, South Korea and China. On Wednesday. she became the first US
secretary of state to visit the secretariat of the Association of South East
Asian Nations, where she announced that Washington would begin the process to
accede to Asean's treaty of amity and co-operation.
By signing the treaty, the US would agree not to launch a unilateral strike
against any signatory - which includes most of east Asia.
Additional reporting by Taufan Hidayat