Thailand
Indonesia president nominates central bank governor for second term
INDONESIA President Joko Widodo has nominated to parliament central bank governor Perry Warjiyo for a rare second term, a senior lawmaker said on Wednesday (Feb 22), paving the way for another five years in charge after his first term ends on May 23.
Said Abdullah, a member of the parliamentary commission that oversees central bank affairs, said Warjiyo is the sole candidate.
Reuters reported on Tuesday that the president, known by his popular name Jokowi, would nominate only Warjiyo, according to sources with knowledge of the process.
Jokowi’s office and Warjiyo did not immediately respond to requests for comment. The central bank declined to comment.
By law, parliament has a month to consider the nomination and could reject it. However, with Jokowi’s coalition controlling more than three quarters of seats, a rejection is unlikely.
“We must secure the president’s policy because we are part of the political power supporting the government,” Said, a senior member of the president’s Indonesian Democratic Party of Struggle, said, referring to the nomination.
He said lawmakers would consider a couple of points during Warjiyo’s nomination process, which typically includes a fit-and-proper test, such as his ability to face unpredictable challenges and views on policies such as foreign exchange management.
The rupiah fell 0.1 per cent during trading on Wednesday, after the Reuters report the previous night, although movements may be more affected by fears of higher-for-longer US interest rates hitting sentiment. Confirmation of Warjiyo’s nomination on Wednesday came after trading closed.
Warjiyo, 63, is a career central banker who has played a key role in reforming Bank Indonesia’s (BI) monetary policy mix and its pandemic response, which included unconventional policies such as buying bonds directly from the government rather than just in the secondary market.
Warjiyo, who once served as an executive director of the International Monetary Fund, has been popular among many bankers in Indonesia, who credit him with helping to maintain a strong economy despite challenges of Covid-19 and geopolitical turmoil.
However, some economists have criticised BI under Warjiyo, saying it started its recent rate hike cycle too late, behind other central banks around the world.
Last week, Warjiyo said he saw no need for further hikes, after BI lifted rates by a total of 225 basis points since August, despite major central banks including the US Federal Reserve seen continuing with their monetary tightening.
“(Warjiyo) successfully delivered economic stability amid various turmoil in the past five years,” said Fakhrul Fulvian, chief economist with brokerage Trimegah Sekuritas, adding BI policy in his second term should “support investment-driven growth”.
Maybank Indonesia’s economist Myrdal Gunarto said BI’s policy has been “anticipatory and smooth” under Warjiyo and that his renomination “would provide certainty for markets about the direction of monetary policy”.
BI reviews and decides on its policy every month, with the governor and currently five deputies having voting rights over decisions such as benchmark interest rate level. REUTERS