The International Monetary Fund (IMF) is ready to help countries hit by this weeks stock markets meltdown, but will insist on tough economic policies in return, a senior IMF official said on Tuesday.
IMF first deputy managing director Stanley Fischer told a seminar that it was close to sealing a loan arrangement with Indonesia, the latest of the one-time Asian tiger economies to turn to the fund for help.
We stand ready to do our duty, which is to stabilise economies that may need financial assistance, provided they are willing to undertake appropriately ambitious economic reform and adjustment programs, he said.
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But Thailand, which was sanctioned a $17.2 billion international loan package in August, needed to do more to convince financial markets that its seriousness towards reforms, Fischer added.
World stock markets have ridden a roller coaster in the last few days, with sharp changes in one market pushing stocks in the next time zone up or down.
The loan package for Thailand was the biggest deal since the international community made almost $50 billion available to Mexico in 1995.
Fischer said the policies underpinning the loan were sound, but Thailand needed to convince markets that painful new rules on financial markets would be implemented.
Thailand has to show it will follow through, he said adding that while the measures themselves are very good, the implementation has to be demonstrated. There have been few clear indications about the size of the IMF loan to Indonesia. But President Suharto said on Tuesday that Singapore was ready to make $10 billion available to support its currency and restore market confidence.
Malaysia, whose Prime Minister Mahathir Mohamad blames speculators for Asias market troubles, has also promised to help Indonesia out.