Indonesia President to Back C.Bank Chief Warjiyo for Rare Second Term

KONTAN.CO.ID - JAKARTA. Indonesian President Joko Widodo will nominate central bank governor Perry Warjiyo for a second five-year term and will put forward no other candidates for the post, three sources familiar with the matter said on Tuesday.

Jokowi, as the president is popularly known, earlier said he would decide on Tuesday or Wednesday which candidates he would nominate to parliament.

The sources, who have knowledge of the nomination process for Bank Indonesia (BI) governor, declined to be identified because they were not authorised to speak on the matter.

They said the president had only one candidate in mind. The presidential palace and the central bank did not immediately respond to requests for comment.

Rarely has an incumbent governor been nominated for a second term. In the past few instances, including when Jokowi nominated Warjiyo in 2018, only one name was submitted to lawmakers.

Warjiyo, 63, is a career central banker who has played a key role in reforming BI's monetary policy mix and its pandemic response, which included unconventional policies such as buying bonds directly from the government rather than just in the secondary market.

He has been popular among many bankers in Indonesia who credit him with helping to maintain a strong economy despite challenges of COVID-19 and geopolitical turmoil.

Warjiyo once served as an executive director of the International Monetary Fund for two years from 2007, representing 13 countries in the Southeast Asia voting group.

CONTINUITY APPROACH

Last month, sources told Reuters Jokowi was considering Warjiyo and looking at several others for the job.

Those included his Finance Minister Sri Mulyani Indrawati, Deputy Central Bank Governor Destry Damayanti and the head of the Indonesia Deposit Insurance Corporation, Purbaya Yudhi Sadewa.

The sources on Tuesday said Jokowi decided not to nominate Sri Mulyani because he did not want to lose her as finance minister due to her good performance.

"It would be unfortunate to let go of Sri Mulyani," said one of the sources, a parliamentarian.

Jokowi's nominations are required by parliament before the end of this week so it can conduct a "fit-and-proper" test on them. The president can by law submit at most three names and parliament must decide their pick or reject those candidates within a month.

Another of the sources said they were 97% certain Warjiyo was the president's only pick, though noting that the nomination had yet to be submitted and "anything can happen" in politics.

BI last week kept its benchmark rate unchanged, after six consecutive hikes totalling 225 basis points aimed at fighting inflation. Warjiyo said afterwards that he saw no need for further rate hikes, however, with inflation easing faster than initially estimated.

BI's policy direction is expected to remain data-dependent regardless of whether or not its leadership changes, said David Sumual, an economist with one of Indonesia's biggest lenders Bank Central Asia.

"It's not about one individual, (Warjiyo's) view, but institutionally (BI) has said rate hikes have been sufficient, subject to future developments," he said.