By Paul Blustein
Washington Post Staff Writer
Wednesday, October 8, 1997; Page C15

Indonesia is considering asking the International Monetary Fund for financial assistance following a virtual collapse of its currency over the past few days, according to people familiar with the matter.

Although a final decision hasn't been made to seek IMF help, Indonesian representatives were talking on a preliminary basis with IMF officials yesterday about the possibility of doing so, the sources said.

If Indonesia, the world's fourth-most populous country, does turn to the IMF, it would underscore the severity of the financial crisis that has battered Southeast Asia's "tiger" economies in recent months. Starting with Thailand in early summer, the fast-growing countries of the region have suffered declines of between one-fourth and one-third in the value of their currencies, and their stock markets also have plunged.

The IMF and a group of countries led by Japan provided Thailand with a $17 billion emergency bailout in August, the second-largest such package after the $50 billion bailout of Mexico in 1995.

Indonesia is widely viewed by economists as economically stronger than Thailand because of its continued growth in exports and lower short-term debt to foreigners. But the Indonesian rupiah has fallen by 18.6 percent against the the U.S. dollar in the last two weeks, partly because of the effects of Thailand's crisis. That has raised fears that some major Indonesian firms and banks may find themselves unable to repay borrowings they made in dollars.

On Monday, an IMF spokesman said flatly that no consideration was being given to a credit package for Indonesia. Yesterday, however, he said: "We have nothing to say at this point, other than that we are in close touch with the authorities."