Bank Indonesia Governor Candidate Stresses Inflation Is Not Solely BI's Responsibility

Jakarta - Bank Indonesia (BI) Governor candidate Destry Damayanti has stressed that controlling inflation is not entirely in the hands of the central bank. She made the statement during her presentation at a fit and proper test before the Indonesian House of Representatives (DPR RI) on Wednesday (26/8/2026).

According to her, core inflation, which is influenced by the demand side, is indeed the main domain of monetary policy. However, other inflation components such as food prices and administered prices require government involvement.

Destry explained that core inflation contributes around 65% to overall inflation. Meanwhile, food inflation accounts for about 19%. Therefore, if food prices are not controlled, pressure on national inflation will remain significant even if BI implements tight monetary policy.

“Inflation certainly cannot be handled by BI alone because of the demand side, since core inflation is 65% of headline inflation,” she said.

Besides food factors, inflation is also influenced by administered prices such as fuel prices (BBM). According to Destry, fuel price increases typically impact inflation for one to two months before adjusting again.

“One administered price component contributes 16%, and there are several base effects. If there is a fuel price increase, headline inflation rises for one to two months and will adjust. If we can maintain the demand side, inflation certainly cannot be handled by BI alone,” she stressed.