Indonesia's troubled banking sector was last night teetering on the verge of collapse as the rupiah fell to a low of 15,000 against the US dollar, prompting further central bank intervention.
Bankers were warning that the supply of dollars from Hong Kong and Singapore was being curbed by nervous dealers, analysts said.
The dollar crunch was meanwhile being intensified onshore as the domestic interbank market dried up amid fears the International Monetary Fund and the government had no answer to mounting debt woes in the private sector.
An estimated US$80 billion is seen as unpayable at present currency levels.
The collapse came despite a revised budget which outlined tighter fiscal control over the Indonesian economy after its first budget incurred the IMF's wrath for failing to demonstrate commitment to reform.
Indonesian Finance Minister Mar'ie Muhammad formalised a set of revisions agreed to between President Suharto and the IMF last week in a budget session with the Indonesian House of Representatives.
The government raised its expected average exchange rate for 1998-1999 to 5,000 rupiah from 4,000 rupiah.
