Expert: Market Will Respond Well if New BI Governor Has Strong Track Record
Jakarta (ANTARA) - Researcher at the BRIN Centre for Economic Research, Syahrir Ika, stated that if the replacement for Perry Warjiyo as Governor of Bank Indonesia (BI) has a strong and independent track record, the financial market will respond positively through a strengthening rupiah, a reduction in risk premiums, and increased confidence.
“If the replacement has a strong and independent track record, the market can actually respond positively through a strengthening rupiah, a reduction in risk premiums, and increased investor confidence,” Syahrir said in a statement in Jakarta on Monday.
On Monday morning, Minister of State Secretary Prasetyo Hadi announced the resignation of Perry Warjiyo as Governor of Bank Indonesia.
Syahrir said the impact of Perry’s resignation can be analysed from two perspectives, namely the financial market and economic fundamentals. He said the replacement for Perry as BI Governor will face challenges in maintaining rupiah stability, controlling inflation, strengthening capital flows, increasing productivity, and encouraging quality economic growth.
“All of this requires synergy between monetary, fiscal, and real sector policies. Therefore, the change in BI leadership is only one factor, not the main determining factor,” said Syahrir, who is also the General Chair of the Indonesian Researchers Association (PPI).
Furthermore, Syahrir said the opportunity with the arrival of a new BI Governor lies precisely in the possibility of a more adaptive policy approach to new challenges. For example, strengthening rupiah exchange rate stabilisation; deepening the domestic financial market so it is not overly dependent on foreign capital; accelerating the transformation of the digital payment system; and strengthening policy coordination with the government to support economic growth without sacrificing price stability.
“My conclusion is that optimism towards the Indonesian economy is not placed solely on a change of figure, but on the ability of the new BI Governor to maintain policy credibility,” said Syahrir.
In a modern economy, he continued, the market values policy continuity more than just a change in leadership. “If the new leader is able to present innovation without reducing Bank Indonesia’s independence, then this change can actually become a momentum to strengthen market confidence while improving Indonesia’s economic fundamentals,” he said.
Previously, Minister of State Secretary Prasetyo Hadi stated that President Prabowo Subianto had accepted the resignation of Bank Indonesia Governor Perry Warjiyo and would follow up on it according to the mechanism stipulated in the Bank Indonesia Law. Prasetyo, in a press conference at the Bank Indonesia Governor’s Office in Jakarta on Monday, said the government officially received Perry’s resignation letter on Sunday (26/7).