Indonesia President Prabowo Subianto has nominated Destry Damayanti as the sole candidate to be the next central bank governor, a presidential spokesperson said on Monday.
Investors have been closely monitoring the nomination process after the sudden resignation late last month of governor Perry Warjiyo for personal reasons. Destry was the central bank’s second most senior official and has been serving as interim governor.
Reuters reported last week Destry, Bank Indonesia’s senior deputy governor since 2019, was the frontrunner to take the job.
The rupiah extended gains after news of Destry’s nomination to reach its strongest level against the U.S. dollar since June 18.
The parliament, controlled by Prabowo’s big-tent coalition, has one month to approve or reject the candidate. Parliament has not rejected a sitting president’s nominee for governor since 2008.
Warjiyo’s departure had triggered a fresh bout of investor anxiety about investing in Indonesia, with confidence already waning on the G20 economy amid concerns over fiscal profligacy, central bank independence, transparency issues with its equity market, as well as the impact from the Iran war.
Bank Indonesia has come under pressure to support Prabowo’s key programmes and accelerate growth to 8%, from around 5% now, which it has had to balance with its other objectives of managing inflation and the rupiah exchange rate.
Under Warjiyo, the central bank has raised interest rates by 100 basis points this year, introduced rupiah hedging perks and used high yielding short-term BI securities to attract capital inflows to try to put a floor under the rupiah.
Reuters
