President Prabowo Subianto has nominated his nephew to join the central bank’s board of governors, two sources have 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 South-East Asia’s largest economy might be under pressure as Prabowo targets economic growth of 8% by 2029, from about 5% now.
Those fears grew after Bank Indonesia (BI) unveiled a new burden-sharing deal last year to fund some government programmes.
Thomas Djiwandono, a deputy finance minister who is a former businessman, will soon face a fit-and-proper test by Parliament for the new job, said the two sources, who sought anonymity as they were not authorised to speak to media.
The US-educated Djiwandono will replace current BI board member Juda Agung, one of the sources added.
Each member of the bank’s board, comprised of a governor and several deputy governors, has a voting right to decide key interest rate levels and determines BI’s policy.
Members are usually career central bankers, economists or former executives of commercial banks appointed by the president with parliamentary approval.
Last year, Djiwandono attended at least one central bank monetary policy review as a finance minister representative, but did not have a right to vote. — Reuters
