- Bank Indonesia projects 2027 growth at 5.2% to 6%, Destry says
- Destry: stability will remain top priority amid high global uncertainty
- Destry backs export-centralisation, retained export proceeds to boost revenue
JAKARTA, Sept 1 (Reuters) - Indonesia's parliament voted on Tuesday to appoint Destry Damayanti as the first woman to head the central bank, and she announced an upgraded forecast for economic growth, predicting it could reach 6% next year for the first time since 2012.
Destry, 62, was the sole nominee for the job following the surprise resignation in July of Governor Perry Warjiyo midway through his second term.
Warjiyo had a major disagreement with the finance minister over economic growth strategies before his exit, Reuters reported, underscoring months of reported tensions between the country's top financial officials.
Destry was endorsed by parliament's financial committee last week. She will be sworn in at the Supreme Court on Wednesday.
“Bank Indonesia projects economic growth will increase in 2027 within the range of 5.2% to 6%, supported by growing confidence among economic actors and an increase in investment specifically originating from Danantara,” she told lawmakers in a presentation shortly after the vote.
Danantara is a new sovereign wealth fund set up by President Prabowo Subianto and tasked with executing his economic and policy targets.
The new BI growth forecast for next year represents only a slight rise from the 5.1% to 5.9% projection under Warjiyo, but the new upper bound of 6% matches a 2027 target set by Prabowo, who ultimately aims to raise growth to 8%.
Parliament, controlled by his ruling coalition, has passed a bill doubling down on BI's role in supporting growth. Prabowo also appointed his nephew as one of the central bank's deputy governors. Some investors have expressed concerns about central bank independence under Prabowo, who came to power in 2024.
Destry expressed confidence in two contentious government policies: centralising strategic commodities exports under Danantara, and imposing stricter rules on the retention of earnings from exports, both of which she said would improve government revenue and strengthen the rupiah currency.
She said the bank would also continue to strengthen supervision over dollar purchases in large amounts by banks and corporations, as well as strengthen foreign exchange traffic reporting regulations.
BI estimates the rupiah exchange rate will average between 17,300 and 17,800 per U.S. dollar in 2027, she added. The rupiah , the worst-performing among emerging Asian currencies, traded around 17,700 a dollar on Tuesday.
Analysts have said Destry, a Cornell-educated economist who has been a senior deputy governor since 2019, would provide continuity in monetary policy while retaining a good working relationship with the Prabowo administration.
'STABILITY IS TOP PRIORITY'
Speaking separately to reporters after the parliamentary vote, Destry said economic stability would be her top priority as central bank governor, promising to work with the government to keep inflation under control, but also to provide sufficient monetary liquidity to promote economic growth.
"We see that global uncertainty is still high, so it means stability will still be our priority," she said.
Destry will take the job at a challenging time for the $1.4 trillion economy, with investors concerned about fiscal management and stock market transparency, on top of questions about the central bank's autonomy.
During her vetting last week, Destry said Indonesia faced a "highly complex situation" that required stronger coordination among different institutions, but stressed that cooperation with state agencies would not compromise central bank independence.
BI raised interest rates by 100 basis points between May and June to defend the rupiah.
On Tuesday, in his first public statement since stepping down, former Governor Warjiyo said BI's newly approved leadership should strengthen its mandate of ensuring stability and supporting growth.
Reporting by Stefanno Sulaiman and Stanley Widianto; Writing by Gibran Peshimam and Gayatri Suroyo; Editing by John Mair, Martin Petty, Peter Graff
Source: Reuters