Japan, Indonesia to sign crisis loan pact

Agence France-Presse
First Posted 14:07:00 07/06/2009

TOKYO, Japan—Japan is to agree to provide some $15.6 billion in emergency loans to Indonesia in the event of a severe shortage of foreign currency, according to a report Monday.

The 1.5-trillion-yen deal, created under a new assistance scheme announced in May, was the first of a series of agreements that Tokyo planned to conclude with a number of Asian nations, the Nikkei business daily reported.

Officials from Indonesia's finance ministry would visit their Japanese counterparts in Tokyo as early as Monday to sign the deal, the newspaper said.

The emergency assistance would take the form of a currency swap and was aimed at helping Indonesia cope with a shortage of foreign currency in the event of a severe financial crisis, the Nikkei said.

The deal would allow Indonesia to convert the loan into dollars if it faces a shortage of the US currency, the newspaper said.

Providing yen-denominated loans was also aimed at promoting a greater use of the Japanese currency worldwide, it added.

Japan planned to sign similar agreements with the Philippines and Thailand, the Nikkei said.