JAKARTA: Indonesian President Prabowo Subianto has nominated his nephew to join the central bank’s board of governors, his spokesperson said, amid growing concern about its independence as the government seeks more support for ambitious economic targets.
Investors have worried that independent monetary policymaking in Southeast Asia’s largest economy might be under pressure as Prabowo targets economic growth of 8 per cent by 2029, from about 5 per cent now.
The rupiah currency hit a nine-month low on Monday (Jan 19) amid uncertainty from a new US tariff policy, concerns over Indonesia’s widening fiscal deficit and news of the central bank nomination.
Prabowo’s nephew Thomas Djiwandono, currently a deputy finance minister, is one of three nominees whose names have been submitted to parliament, presidential spokesperson Prasetyo Hadi told reporters.
The nomination follows the resignation of Bank Indonesia’s (BI) deputy governor Juda Agung, he said, before the end of his tenure in 2027.
Finance Minister Purbaya Yudhi Sadewa said Agung will join the finance ministry, representing a swap of top officials that would not hurt the independence of either institution.
“There may have been speculations that because Thomas is going there, the (central bank’s) independence is gone. I disagree,” Purbaya said.
“Once they realise it’s not the case, (the rupiah) will strengthen,” he said, adding his ministry and BI will synchronise fiscal and monetary policies to spur faster economic growth.
BI confirmed in a statement that deputy governor Agung submitted his resignation on Jan 13.
The central bank further said it would remain focused on maintaining the rupiah and financial system stability to support sustainable economic growth.
Djiwandono and Agung did not immediately respond to requests for comment.
https://www.channelnewsasia.com/asia/indonesia-prabowo-subianto-nominates-nephew-central-bank-deputy-governor-5867891
