Indonesia’s Parliament voted on Sept 1 to appoint Destry Damayanti as the first woman to lead Bank Indonesia (BI), and she raised the central bank’s 2027 economic growth forecast to as high as 6 per cent (01/09).

Destry, 62, was the sole nominee for the position following the surprise resignation of governor Perry Warjiyo in July, midway through his second term.

Destry was endorsed by Parliament’s financial committee last week and is scheduled to be sworn in at the Supreme Court on Sept 2.

Warjiyo had a major disagreement with the finance minister over economic growth strategies before his departure, according to Reuters. The dispute came after months of reported tensions between the country’s top financial officials.

Destry is a Cornell-educated economist who has served as BI’s senior deputy governor since 2019. Analysts said she would provide continuity in monetary policy while maintaining a good working relationship with the administration of President Prabowo Subianto.

Bank Indonesia Raises 2027 Economic Growth Forecast

Destry said BI now expects Indonesia’s economic growth in 2027 to be between 5.2 per cent and 6 per cent.

“Bank Indonesia (BI) projects economic growth will increase in 2027 within the range of 5.2 per cent to 6 per cent, supported by growing confidence among economic actors and an increase in investment specifically originating from Danantara,” she told lawmakers shortly after the vote.

The new forecast is only slightly higher than the previous projection under Warjiyo, which put 2027 growth between 5.1 per cent and 5.9 per cent.

The new upper limit of 6 per cent matches Prabowo’s 2027 growth target. Prabowo has said he ultimately aims to raise economic growth to 8 per cent.

Danantara is a new sovereign wealth fund established by Prabowo and tasked with carrying out his economic and policy targets.

Destry also expressed confidence in the government’s policies to centralise strategic commodity exports under Danantara and impose stricter rules on the retention of export earnings.

She said the policies would improve government revenue and strengthen the rupiah.

Destry Puts Economic Stability First

Destry said economic stability would be her top priority as governor. She also said she would work with the government to keep inflation under control while providing sufficient monetary liquidity to support economic growth.

“We see that global uncertainty is still high, so it means stability will still be our priority,” she told reporters after the parliamentary vote.

BI will continue strengthening supervision of large dollar purchases by banks and corporations. The central bank will also strengthen regulations on foreign exchange traffic reporting.

BI estimates that the rupiah will average between 17,300 and 17,800 per US dollar in 2027. The rupiah, the worst-performing among emerging Asian currencies, traded at around 17,700 per US dollar on Sept 1.

Concerns Over Central Bank Independence

Destry will take over the central bank at a challenging time for Indonesia, South-east Asia’s largest economy, valued at US$1.4 trillion (S$1.78 trillion).

Investors have expressed concerns about fiscal management, stock market transparency and the central bank’s autonomy under Prabowo, who came to power in 2024.

Parliament, which is controlled by Prabowo’s ruling coalition, has passed a Bill strengthening BI’s role in supporting economic growth. Prabowo also appointed his nephew as one of the central bank’s deputy governors.

During her vetting last week, Destry said Indonesia faced a “highly complex situation” that required stronger coordination among institutions. She stressed that cooperation with state agencies would not compromise BI’s independence.

BI raised interest rates by 100 basis points between May and June to defend the rupiah.

On Sept 1, former governor Warjiyo made his first public statement since stepping down. He said BI’s newly approved leadership should strengthen its mandate to ensure stability and support economic growth.

PHOTO: ANTARA

This article was created with AI assistance.

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