Lawmakers in Indonesia will on Wednesday conduct a “fit and proper” hearing for Destry Damayanti, the sole candidate nominated for its central bank governor, who could become the first woman to take the top job.
If given the green light, Destry, the current interim governor, would take charge at a tumultuous time in Indonesia, with concern lingering among businesses and investors about fiscal management, central bank autonomy, equity market transparency and the stewardship of the $1.4 trillion G20 economy.
With parliament dominated by parties allied with President Prabowo Subianto, 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.
PREDECESSOR’S SURPRISE EXIT
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.
Destry, 62, will be vetted by parliament’s financial committee on Wednesday and needs to pass a plenary vote before being appointed by the president.
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.
Destry was an economist before working at Citibank and state-owned lender Bank Mandiri. She holds a master’s from Cornell University and was a commissioner at Indonesia’s deposit insurance agency between 2015 and 2019 before joining the central bank.
Reuters
