Indonesia parliament confirms new central bank chief

Indonesia's parliament has officially confirmed Destry Damayanti as the new governor of the central bank, Bank Indonesia, following the sudden resignation of Perry Warjiyo in July. Damayanti, who was nominated by President Prabowo Subianto, had been serving as acting governor since Warjiyo's departure.

Prabowo's selection of Damayanti has been closely observed, raising concerns about potential political interference. However, her nomination has been seen by Fitch Ratings as a sign of expected policy continuity. At 62 years old, Damayanti is an economist and has been a deputy governor at Bank Indonesia since 2019.

During a confirmation hearing before parliament, Damayanti pledged to maintain Bank Indonesia's relevance in addressing challenges and preserving its credibility in maintaining economic stability while promoting sustainable growth. This comes after Perry's resignation, which was the second major economic policy departure since Prabowo assumed office in October 2024, leading to speculation that he may have faced pressure to enhance the government's pro-growth agenda.

The resignation of Perry Warjiyo occurred amidst a challenging environment, with the Indonesian rupiah declining and the stock market experiencing a slump. On his last policy meeting in July, the Bank Indonesia board, which includes the governor and several deputies, decided to maintain borrowing costs at 5.75%. This decision was based on a cumulative 100-point increase in interest rates this year, which may have been perceived as frustrating to the government. Perry's last decision was also to keep interest rates unchanged last month.