Updates from the Managing Director

 [LOIMOU] Kafka 1

Indonesia is in a BOP crisis Rapid capital outflows following the Christmas Scandal threw financial markets in Jakarta into utter chaos. The withdrawal of funds en masse triggered a sharp devaluation of the rupiah, placing a larger strain on companies that borrowed from foreign creditors. Many companies that could not meet their debt obligations filed for bankruptcy. Meanwhile, the Bank of Indonesia, in an attempt to defend the rupiah from further devaluations, exhausted its foreign reserves to artificially increase the demand for rupiah. With foreign reserves dwindling rapidly, the BI now calls for international assistance. All eyes are on the IMF.

  Following a landmark $20 billion package approved by the IMF, Thailand’s conditions send its economy into a much deeper hole In a hotly debated move, Thailand accepted a $20 billion Lending Arrangement with a condition to increase its interest rates to 20%. This unprecedented jump has been met with widespread protests from consumers and business owners alike, as most businesses are no longer able to secure loans in the face of suffocatingly high interest rates. Higher costs of borrowing have suppressed investments in Thailand, and largely discouraged MNCs and foreign firms from expanding their operations in the country. Large-scale projects have been halted, and research and development activities have declined sharply in response to such monetary tightening. The Thai economy is expected to contract with a GDP growth estimate as low as -4.1% due to the exacerbation of the recession by the IMF-stipulated policy. While the Thai baht’s devaluation seems to have reached its peak, cap...

The International Monetary Fund would like to state for the record to all investors across the globe: The Thailand government is currently in talks with the IMF Directors of France, the UK, Germany and the USA to help Thailand successfully alleviate the currency crisis. With such measures being implemented, Thailand’s economy will do extremely well domestically, and profitability for companies is increasing significantly. Companies across the world should take advantage of this amazing corporate growth to invest in Thailand right now. Furthermore, the International Monetary Fund will be facilitating the overseas financing fund, more precisely the American-led Initiative for Recovery and Investment Networks to Defend International Assets, for American and EU based companies to set up branches in Thailand, which will help to lower unemployment rates, and bolster the Thai economy. Furthermore, due to the high profitability companies in Thailand are currently seeing, and furthermore given ...

  [LOIMOU] Muhammad 1

One of the largest scandals since the start of the financial crisis In a recent white paper made public by an anonymous individual who wishes to refer to himself as “Santa  Claus”, several large conglomerates in Indonesia were exposed to have engaged in accounting and financial statement fraud. Among these conglomerates are the Salim Group and Astra International, companies that  have garnered the faith and support of investors before and during the crisis. Specifically, non-existent  assets were added to balance sheets and the value of liabilities were manually reduced on paper. Cash  flows were tweaked to reflect positive inflows and healthy cash conversion cycles to fool investors into  purchasing their shares and bonds, although in reality many of these companies were already in large debt,  with many engaging in debt rollovers with no prospect of repaying their loans in the near future. Moreover,  although many banks and financial institution...

Deflationary crisis arising from plummeting investment and foreign  demand; How will South Korea respond? Yeouido is abuzz with a new panic, fueled by the wider Asian Crisis. With mass asset sell-offs and  plummeting investment in the past few weeks, fears of a recession have set in Korean markets. The  KOSPI is down 22% over the past 3 months in a historic drop, as inflation rates are widely expected to  continue their steep decline.  In response, the Korean government's GDP growth estimate has fallen to -1.5% without any signs of  recovery, stoking predictions of recession. Korea’s debt-to-GDP has skyrocketed, and unemployment is  now a staggering 8%. In recent months, President Kim Young-sam’s government has come under immense  public scrutiny for its economic policies; some experts fear severe political unrest may be brewing.