Perry Warjiyo resigns as Governor of Bank Indonesia, Indonesia’s State Secretariat Minister Prasetyo Hadi confirmed on Monday, July 27, in a move described by analysts as a surprise that could unsettle investors concerned about the central bank’s independence and the country’s fiscal management, according to The Star.
President Prabowo Subianto has accepted Warjiyo’s resignation, Prasetyo said ahead of the opening of financial markets in Jakarta on Monday morning. Destry Damayanti, a senior deputy governor at Bank Indonesia, has been appointed interim governor following the announcement.
Destry said Warjiyo had stepped down for personal reasons. Prasetyo said Warjiyo submitted his resignation through a letter to the president but declined to elaborate further on the reasons behind the decision. Warjiyo could not be reached for comment, The Star reported.
Angus Mackintosh, an ASEAN specialist at Aletheia Capital in Singapore, said the resignation would likely be viewed negatively by markets, describing Warjiyo as having had a steady track record. Mackintosh said market reaction would depend heavily on who succeeds him, adding that if Prabowo’s nephew, Deputy Governor Thomas Djiwandono, were to take over, markets would likely view the appointment with suspicion given the central bank’s need to remain independent in what he called a crucial technocratic post.
Warjiyo was first appointed as governor in 2018 and was reappointed for a second five-year term in 2023, according to The Star. His departure comes as Bank Indonesia faces pressure to support President Prabowo’s growth-focused economic agenda, while the rupiah slid to a historic low in June amid global market turmoil and concerns over the country’s fiscal management and central bank independence.
Indonesia’s parliament last month passed sweeping legislation expanding Bank Indonesia’s role in supporting economic growth, while also empowering lawmakers to make binding recommendations to independent financial regulators and the central bank, The Star reported. The leadership change also comes amid a broader pattern of scrutiny facing state institutions across emerging markets, with South Africa’s Public Investment Corporation recently seeing its own leadership shake-up after David Masondo resigned as PIC chairperson amid governance concerns.
Destry told reporters following the resignation announcement that Bank Indonesia would continue to ensure the continuity of its duties and authorities to maintain stability of the rupiah and the financial system, with the aim of supporting an economic environment conducive to growth. Further information on the central bank’s mandate and operations is available through Bank Indonesia’s official website.
Bank Indonesia surprised markets last week by keeping policy rates unchanged, instead introducing new incentives aimed at attracting foreign capital inflows to support the rupiah. The central bank had raised interest rates by a total of 100 basis points since May in an effort to draw foreign inflows and shore up the currency, according to The Star.
Brokerage Mirae Asset Sekuritas said in a note that the development is expected to become a key focus for financial markets, as investors await the government’s decision on Warjiyo’s successor and assess the implications for the continuity of the central bank’s monetary policy, institutional credibility and overall policy direction.
With Destry now serving as interim governor, Bank Indonesia’s day-to-day operations are expected to continue without interruption, though analysts said the government’s eventual choice of a permanent successor would carry significant weight for how markets perceive the institution’s independence going forward. No confirmed date has been given for when a permanent appointment will be announced, according to available reporting.
The Star noted that last year, the abrupt removal of Indonesia’s influential finance minister, Sri Mulyani Indrawati, had rattled markets, with investors fearing that the country’s fiscal credibility could be eroded by populist and costly spending plans under Prabowo’s administration. No timeline has been confirmed for the appointment of a permanent successor following Perry Warjiyo’s resignation, according to available reporting.
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