Indonesia prepares rescue package to counter tapering U.S. QE

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JAKARTA, Sept. 9 -- The Indonesian government prepares a rescue package in anticipating the implementation of tapering quantitative easing by the U.S. government, a minister said here on Monday.

Indonesian Finance Minister Basri Chatib said that the government had prepared to make a bilateral swap deal with Japan and was in talks with two others countries in the region for such a deal.

Under the bilateral swap agreement, the countries could give a short term liquidity aid in the form of exchanging foreign currency in a bid to strengthen foreign exchange reserve of a country having a problem on current account.

Nevertheless, the minister did not give the name of the two other countries.

"So if there is a shock linked with QE (quantitative easing), we have a good rescue package," he said at the parliament.

"The bilateral swap with Japan has been announced, valued at 12 billion U.S. dollars," said Chatib.

Minister Chatib said that step was similar with that used by the government to anticipate the financial crisis in 2008.

Indonesia survived the crisis by registering economic growth of 4.5 percent when other Asian peers had strong contraction.

Beside the funds from the swap, the government has also prepared 5.5 trillion rupiah (some 491.59 million U.S. dollar) to guard the stock market from the risks of tapering U.S. quantitative easing, according to Chatib.

Nevertheless, the minister said that he expected the market condition would not be as bad as that of in 2008.

"Our condition is now better that that of in 2008," said Chatib.

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