Another important finding is that reactions to IMF policy by the
local authorities and the public may reverse the initial favorable
impact of such policy on asset returns. Hence, the net impact of
IMF policy on private financial markets during a financial crisis
can be best evaluated by considering actions of the other major
players, namely, the government’s willingness to implement IMF
policy and the public’s reaction to both IMF and government policies.
Hence, an important lesson that derives from our findings is
that the success of IMF policies hinges heavily on strong support
by both the government and the public. Further evidence
from other countries and crisis episodes are necessary to see
whether our findings from Indonesia can be generalized to other
countries.