Lead
Perry Warjiyo has resigned as governor of Bank Indonesia, a move that analysts say could worry investors concerned about the central bank's independence and the country's fiscal management. Indonesia's State Secretariat Minister Prasetyo Hadi announced the resignation on Monday, saying President Prabowo Subianto had accepted it. Destry Damayanti, a senior deputy governor, has been appointed as interim governor.
Coverage Comparison
The South China Morning Post reported Warjiyo's resignation, citing Minister Hadi. The outlet also covered the appointment of Destry Damayanti and the possible consideration of Thomas Djiwandono, Prabowo's nephew, as a permanent replacement. Analysts quoted in the reports expressed concern over the central bank's independence and fiscal management.
A separate report from the same outlet highlighted the broader dilemma facing Warjiyo and his regional peers: balancing the need to defend weakening currencies and contain inflation with pressure to support economic growth. The report speculated that Warjiyo may have been under pressure to support Prabowo's growth agenda.
Key Claims
- Perry Warjiyo resigned as Bank Indonesia's governor on Monday, nearly two years before the end of his second term, according to Minister Prasetyo Hadi.
- Warjiyo submitted his resignation through a letter to President Prabowo Subianto, the minister said, without elaborating on personal reasons.
- Destry Damayanti, a senior deputy governor, has been appointed as interim governor.
- Thomas Djiwandono, Prabowo's nephew, is being considered as a potential replacement, according to analysts cited by the South China Morning Post.
- Warjiyo's decision to raise interest rates to bolster the rupiah has created friction with the government's growth target of 8 percent annual economic growth, analysts say.
- The central bank has raised interest rates by a cumulative 100 basis points to 5.75 percent since May to defend the rupiah.
- Volatile oil prices linked to the US-Iran war have contributed to the rupiah's decline. After falling to an all-time low of 18,190 per US dollar on June 8, the rupiah has pared back losses but was still trading above the 18,000 mark as of Tuesday.
Perspectives
Analysts: Angus Mackintosh, an Asean specialist at Aletheia Capital in Singapore, said Warjiyo's resignation will likely be taken negatively by the market, given his track record. He expressed suspicion about the potential appointment of Djiwandono, stressing that the central bank should remain independent. Other analysts cited concerns about the central bank's independence and fiscal management amid the resignation.
Government: Minister Prasetyo Hadi announced the resignation and stated that President Prabowo had accepted it, but declined to elaborate on Warjiyo's personal reasons. The government has not publicly commented on the speculation regarding pressure on Warjiyo.
Central Bank: Destry Damayanti, as interim governor, indicated that Warjiyo had stepped down for personal reasons. No further details were provided.