By Stefanno Sulaiman
JAKARTA, Aug 26 (Reuters) – Destry Damayanti, the sole candidate nominated for Indonesia’s central bank governor, on Wednesday told a vetting panel she will look to support growth and job creation while ensuring financial stability if she becomes Bank Indonesia’s chief.
Destry, 62, currently interim governor, is undergoing a “fit and proper” hearing in parliament for the role, which could see her become the first woman to take the top job.
It comes at a tumultuous time in Indonesia, with unease among businesses and investors about fiscal management, central bank autonomy, equity market transparency and the stewardship of the $1.4 trillion G20 economy.
“BI is not only tasked with maintaining the stability of the rupiah exchange rate, the stability of the payment system and the stability of the financial system, but also with implementing a policy mix that can create an economic environment conducive to real sector growth and job creation,” Destry told parliament’s financial committee in her opening remarks.
With parliament dominated by parties allied with President Prabowo Subianto, senior deputy governor Destry is widely expected to be confirmed by legislators, who have not rejected a sitting president’s nominee for the post since 2008.
Destry needs to pass a plenary vote before being appointed by the president. The committee’s decision on Destry is expected on Thursday, with the interview process for the senior deputy chief slot expected later on Wednesday.
Reuters had reported Destry was the frontrunner for the job and the August 10 announcement of her candidacy gave a boost to the rupiah, which has plunged amid capital outflows triggered by anxiety and perceptions of policymaking uncertainty.
The rupiah is among Asia’s worst performing currencies, down about 6% against the U.S. dollar, while Indonesian stocks have fallen more than 25% so far this year.
EXCHANGE RATE STABILISATION TO BE STRENGTHENED
Former economist Destry said exchange-rate stabilisation efforts will continue to be strengthened through smart intervention, while pro-market monetary operations will be optimised to improve policy transmission and ensure adequate liquidity for money markets, the banking sector and the real economy.
Sentiment took a hit with the sudden resignation last month of central bank governor Perry Warjiyo midway through his second term, which followed the exit last year of longtime Finance Minister Sri Mulyani Indrawati, who was widely respected for her fiscal prudence.
It is not clear whether the new governor would be appointed for a full five-year term, or the remainder of Warjiyo’s tenure, which expires in 2028.
Economists have said the Cornell-educated Destry, a senior Bank Indonesia deputy governor since 2019, would bring continuity to central bank policy and would prioritise stability while maintaining a good working relationship with the Prabowo administration.
At her first meeting as interim governor last week, the central bank held rates steady, prioritising rupiah stability while pledging to deploy other tools to support growth. Analysts said the policy tone was unchanged from that of Warjiyo.
The central bank has raised interest rates by 100 basis points since May to support the rupiah, including its first off-cycle benchmark rate hike in eight years in June.
(Reporting by Stefanno Sulaiman and Bernadette Christina; Writing by Gibran Peshimam; Editing by Martin Petty )
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