After promising a “pro-stability” monetary posture until 2024, Indonesia’s central bank governor Perry Warjiyo was reappointed by a crucial legislative panel on Monday.
Warjiyo’s five-year tenure as Bank Indonesia (B.I.) chairman ends in May, and he needs full legislative approval to be reappointed. Still, legislators usually adopt the financial committee’s “fit-and-proper test” recommendation.
Warjiyo pledged on Monday to enhance B.I.’s policy mix to achieve price stability and support sustainable economic growth, citing a recent law that expanded B.I.’s mandate to encompass growth.
“This year and next year, we will direct our monetary policy to defend stability, while other policies… will assist economic development,” he added.
He stated B.I. would cut its medium-term inflation objective from 2% to 4% to 1.5% to 3.5%.
High global commodity prices have kept Southeast Asia’s largest economy’s inflation above target since last year.
Warjiyo reiterated that B.I.’s August–January interest rate rises of 225 basis points were enough to bring inflation back to the goal later this year.
“We will focus a lot on the stability of the rupiah currency rate,” he added, citing global risks, including the Ukrainian crisis and U.S. rate rises.
Warjiyo projected 4.9% to 5.7% GDP growth in 2025 and 5.1% to 5.9% in 2028 in his presentation materials.
B.I. predicted 5.3% economic growth in 2023.
The governor touted his accomplishments throughout his time, including B.I.’s bond purchasing and reaction to the U.S. Federal Reserve’s tightening cycle and the epidemic.
Career central banker Warjiyo is 64. Though some analysts have criticized him for starting B.I.’s last rate rise cycle too late and terminating it too quickly, he has helped keep Indonesia’s economy healthy amid uncertain markets.
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