By Stefanno Sulaiman
JAKARTA, Aug 26 (Reuters) – Destry Damayanti, the sole candidate to become Indonesia’s central bank governor, told a vetting panel the country was facing a complex situation requiring cooperation with state institutions, but this would not affect the bank’s independence.
Destry, the current interim governor, would become the first woman to take the top job if, as is widely expected, her appointment is confirmed on Thursday and she is appointed by the president who nominated her.
She is set to start her five-year term at a tumultuous time, with unease among businesses and investors about central bank autonomy, fiscal management, equity market transparency and the stewardship of the $1.4 trillion G20 economy.
WILL INCREASE COOPERATION WITH COMMODITY BODY
“We are facing a highly complex situation in which no single institution can resolve an issue on its own,” Destry, 62, told parliament’s financial committee on Wednesday in response to questions during the 100-minute session.
“Strong synergy is required,” but this “would not reduce the credibility and the independence of Bank Indonesia,” she said.
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.
Destry told parliamentarians that, while she and Perry had different personalities, they were on the same page in terms of policy.
In her presentation, Destry said BI will increase cooperation with state agencies on foreign exchange traffic monitoring, most notably with the newly set up commodities export monitoring body Danantara Sumberdaya Indonesia (DSI) amid government concerns over under-invoicing practices.
The setting up of DSI has spooked traders and investors who fear Indonesia is trying to exert more state control on the exports of its vast resources.
PROMISES TO SUPPORT JOB CREATION
In her opening remarks, she said she would look to support growth and job creation while ensuring financial stability.
Destry needs to pass a plenary vote before being appointed by the president. The interview process for the senior deputy chief slot is expected later on Wednesday.
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.
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.
Economists have said the Cornell-educated Destry, a Bank Indonesia’s senior 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. Analysts said the policy tone was unchanged from that of Warjiyo.
(Reporting by Stefanno Sulaiman and Bernadette Christina; Writing by Gibran Peshimam; Editing by Martin Petty and Andrew Heavens)
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