Indonesia's sole central bank chief candidate vows to back growth, stability

Destry Damayanti, the sole nominee for the governor of Indonesia's central bank, stated on August 26 that she would prioritize supporting economic growth and job creation if confirmed, while also ensuring financial stability. She assured a vetting panel that synergy with other institutions would not undermine Bank Indonesia's independence.

Damayanti, 62, is currently serving as interim governor and is undergoing a parliamentary hearing for the position. Her potential appointment would mark the first time a woman holds the top role at Bank Indonesia. This nomination comes at a critical juncture for Indonesia, a US$1.4 trillion economy, where businesses and investors have expressed concerns regarding fiscal management, central bank autonomy, stock market transparency, and overall economic stewardship.

"BI is not only tasked with maintaining the stability of the rupiah exchange rate, the stability of the payment system and the stability of the financial system, but also with implementing a policy mix that can create an economic environment conducive to real sector growth and job creation," Damayanti told Parliament’s financial committee. With President Prabowo Subianto's allied parties dominating Parliament, Damayanti is widely anticipated to be confirmed, as legislators have not rejected a presidential nominee for the post since 2008. A plenary vote is required before the president can officially appoint her.

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BI is not only tasked with maintaining the stability of the rupiah exchange rate, the stability of the payment system and the stability of the financial system, but also with implementing a policy mix that can create an economic environment conducive to real sector growth and job creation.

Reuters had previously reported Damayanti as the frontrunner, and her candidacy announcement on August 10 reportedly boosted the rupiah, which had fallen amid capital outflows driven by uncertainty. The rupiah has been one of Asia's worst-performing currencies, depreciating about 6% against the U.S. dollar, while Indonesian stocks have declined over 25% this year.

Regarding exchange rate stabilization, Damayanti, a former economist, indicated that efforts would be strengthened through "smart intervention," and pro-market monetary operations would be optimized to enhance policy transmission and ensure sufficient liquidity for money markets, the banking sector, and the real economy. The central bank's credibility faced a setback with the unexpected resignation of Governor Perry Warjiyo last month and the departure of former Finance Minister Sri Mulyani Indrawati last year, who was highly regarded for her fiscal prudence. It remains unclear whether Damayanti will serve a full five-year term or the remainder of Warjiyo's tenure, which concludes in 2028.

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exchange-rate stabilisation efforts will continue to be strengthened through smart intervention, while pro-market monetary operations will be optimised to improve policy transmission and ensure adequate liquidity for money markets, the banking sector and the real economy.