INDONESIA LIMITS OIL PRICE IMPACT-FINANCE MINISTER
Indonesia has minimised the economic
impact of falling oil prices, kept inflation within limits and
boosted exports, Finance Minister Radius Prawiro said.
    Indonesia was badly hit by last year's steep plunge in
crude prices, which cut revenue from oil exports by half.
    But Prawiro was quoted by Indonesian newspapers as telling
President Suharto that inflation was kept to around nine pct in
the financial year ending tomorrow, against around 4.3 pct the
previous year.
    Exports were estimated to have risen by seven pct, he said,
although he did not give complete figures.
    The depressed economy forms the main backdrop to general
elections next month in Indonesia, a major producer of rubber,
palm oil, tin, timber and coffee.
    Prawiro said 1986/87 had also been difficult because of the
appreciation of currencies like the yen and the mark against
the dollar, which increased Indonesia's debt repayments.
    He said the economy would have suffered more from the world
economic recession if the government had not devalued the
rupiah by 31 pct last September.
    In an editorial on the economic outlook, the Jakarta Post
said the government must press ahead with measures to
deregulate the economy to help boost non-oil exports.
    The English-language daily said bigger export earnings were
needed to finance not only imports but also the country's
growing foreign debt, estimated at around 37 billion dlrs.
    "About 50 pct of our foreign debt obligations fall due
within the next three to five years and will steadily increase
the debt servicing burden," the paper said.
    However, end-investors were seen bargain hunting in
expectation of a further yen interest rate decline, dealers
said.
    Most dealers were cautious in the face of the dollar's
nosedive today and the possibility of a U.S. Interest rate
rebound to halt further dollar depreciation.
    A 4.7 pct coupon and volume of 1,400 billion yen for the
April 10-year bond proposed by the Finance Ministry this
afternoon were taken favourably by the market.
 REUTER
