Indonesian president nominates acting central bank governor

Indonesia's president Prabowo Subianto has nominated Destry Damayanti as the sole candidate to become the country's next central bank governor, the government announced on Monday. The acting central bank governor, who has been in charge since Perry Warjiyo unexpectedly stepped down last month, will undergo final approval from the recessed parliament.

Destry, a 62-year-old economist, had previously served as deputy governor of the central bank since 2019. Perry's sudden departure in late July marked the second major economic policymaker resignation since President Prabowo Subianto assumed office in October 2024. This move raised concerns that Perry had faced pressure to bolster the government's pro-growth agenda.

Several analysts believed that the selection of Perry's successor would be scrutinized for evidence of political influence. Thomas Djiwandono, Perry's nephew and another deputy governor, was initially considered a potential candidate, further fueling worries about Bank Indonesia's independence. In July, parliament passed a bill that bestowed responsibility for evaluating the institution's performance and economic growth onto the legislative body, further complicating the central bank's autonomy.

Perry's resignation occurred amid a difficult period for the country, with the rupiah experiencing a steep decline and the stock market suffering significant losses. Since the conflict in the Middle East erupted in February, the currency has plummeted by nearly seven percent, becoming Asia's worst-performing currency, according to Bloomberg News.

The central bank's board of governors, consisting of a governor and several deputies, is responsible for monetary policy and interest rates. During Perry's last policy meeting in late July, the bank maintained its benchmark rate at 5.75 percent after successive increases totaling 100 points this year, which may have frustrated the government.