Economist Assesses Destry Will Continue to Uphold BI Independence

Permata Bank Chief Economist Josua Pardede responded to the fit and proper test of Bank Indonesia (BI) governor candidate Destry Damayanti today at Commission XI of the Indonesian House of Representatives (DPR RI). With one of her main missions related to synergy, Josua sees Destry as continuing to prioritise the independence of Bank Indonesia.

“Synergy does not mean sub-coordination; synergy means remaining on an equal footing,” Josua said when met at the Ministry of Finance office in Central Jakarta on Wednesday (26/8).

Regarding this synergy, he said that not many central banks in the world have a policy mix like Bank Indonesia. On one side, monetary policy can tighten with interest rate hikes, but on the other side, macroprudential policy, payment systems, financial market deepening, and Islamic economics can remain loose.

“And I think we do not find this in other central banks because if, for example, the stance has already tightened, then everything is meant to apply the brakes. But this is where Bank Indonesia has a differentiation, where this policy mix makes Bank Indonesia more flexible,” Josua explained.

“The hope is that with this fit and proper test, and we will also wait for the results later, BI’s independence will continue to be maintained,” he said.

The second hope is that synergy with the government will be further strengthened so that coordination within the Financial System Stability Committee (KSSK) will be reinforced. However, Josua also reminded that policy focus should not only be on fiscal and monetary matters. According to him, the core key to supporting the economy lies in structural reform policies from ministries and agencies.