Economist on Perry Warjiyo's Resignation: Will Not Trigger Market Concerns

Permata Bank Chief Economist Josua Pardede stated that Perry Warjiyo’s resignation should be viewed as an orderly leadership transition, not a vacuum of control at Bank Indonesia. Bank Indonesia (BI) has appointed Senior Deputy Governor Destry Damayanti as Acting Governor following Warjiyo’s voluntary resignation for personal reasons. “The appointment was decided through a Board of Governors’ meeting and is in accordance with applicable laws and regulations. Humanly, Perry Warjiyo’s decision to rest deserves respect,” he explained. He assessed that policy continuity is maintained because BI’s decisions are not fundamentally reliant on a single figure. Decisions are also reached through deliberation by all members of the Board of Governors. “Overall, Perry Warjiyo’s resignation should not trigger excessive concern. Bank Indonesia has a legal foundation, a Board of Governors that works collectively, a complete set of policy instruments, and an Acting Governor who has long been involved in the financial markets,” Josua said. According to him, the key message to the business world and investors is that there is no leadership vacuum, no change in Bank Indonesia’s mandate, and no reason for exchange rate or financial market policies to change abruptly. “The most important challenge now is not Destry’s ability to carry out her duties, but ensuring the transition communication is carried out quickly, consistently, and convincingly,” he said. Josua noted that Destry Damayanti is a figure who is quite prepared to maintain this continuity. She has been Senior Deputy Governor since 2019 and is now serving her second term until 2029. Before joining BI’s leadership ranks, Destry’s experience included roles at Citibank Indonesia, Mandiri Sekuritas, Bank Mandiri, the Ministry of State-Owned Enterprises, and the Indonesia Deposit Insurance Corporation. “This track record demonstrates a strong understanding of market participant behaviour, capital movements, banking, securities, and the formation of investor expectations,” Josua said. Her focus at BI has also included money market and foreign exchange development, as well as rupiah exchange rate stability. Therefore, Josua said, the way BI reads the market and manages the rupiah is unlikely to change suddenly due to this transition. He is confident this continuity is also reinforced by the policy instruments already in place. BI will continue to intervene in the foreign exchange market, manage money market interest rates, maintain adequate banking liquidity, and expand hedging facilities for investors. “All these instruments are already embedded in the institutional framework and can continue to be operated under Destry,” he said. However, he assessed that continuity does not mean BI can assume this transition period is without risk. The market will assess three things: the consistency of BI’s communication, the firmness in maintaining independence, and the certainty of the process for selecting a new Governor. Therefore, he sees that BI needs to immediately affirm that the inflation target, the rupiah stabilisation approach, and interest rate decisions remain based on data and risk developments. “The government also needs to convey that the process of appointing a new Governor is not intended to direct BI to lower interest rates or finance government policies,” he stressed.