Over the weekend, it dissolved seven insolvent banks and acquired another seven, four of which are partly owned by Suharto's kin. As for the settlement of corporate offshore debts, the scheme agreed upon would follow a Mexico-style arrangement that requests debtors to roll over debt and provide a grace period of four to five years in repayment. The government, with the support from IMF, would to a certain extent set the exchange value risk to help firms service their foreign debts. Ginanjar asserted that there will be no bail-outs, and that all commercial risk will remain with debtors. Despite efforts to help the poor however, price hikes on fuel and electricity, scheduled for early next month, will go ahead.
Difficult days continue to lie ahead.
Some 7.5 million people living in 15 provinces risk experiencing food insecurity until early 1999 if the prolonged dry season lasts much longer, the study said.