Australia will contribute A$1 billion ($1.0 billion) to a contingency loan programme for Indonesia, joining Japan, the Asian Development Bank and the World Bank for the stand-by loan facility, Prime Minister Julia Gillard said on Tuesday.
Gillard said the contribution will be part of an international package of contingency loans to Indonesia worth $5.5 billion, which can be accessed if Indonesia's circumstances deteriorate markedly.
The announcement came as Gillard met Indonesian President Susilo Bambang Yudhoyono in the northern Australian city of Darwin.
Indonesia is Southeast Asia's largest economy and the sprawling, resource-rich archipelago has been one of the hottest investment destinations in a world buffeted by Europe's debt crisis and slowing growth elsewhere.
"Continued global uncertainty means that even countries with responsible macroeconomic and banking policies such as Indonesia are being impacted," Gillard said in a statement.
"In light of this, we welcome Indonesia's proactive steps to safeguard their economic stability and their adoption of sound economic policies."
Indonesian exports have fallen for two straight months on the back of lower commodity prices and concerns the Euro crisis could curb demand for Asian goods, although Indonesia's central bank still forecasts 2012 growth of between 6.3 and 6.7 percent.
Even with declining exports, economists expect no sudden Indonesian policy change as domestic consumption drives about 55 percent of its economy.
Gillard said similar loan facilities were available to Jakarta during the global financial crisis and the Asian financial crisis in 1997-98, but were never drawn upon.