Sjahril says he has no plans to resign

Sjahril says he has no plans to resign

SINGAPORE (Agencies): Sjahril Sabirin, governor of Bank Indonesia, said Monday he's not considering resigning and any moves to force him out would violate the independence of the central bank.

"I have not been thinking of resigning. It has not come to my mind," he told reporters on the sidelines of a conference in Singapore.

"Because the current law on the central bank assures my tenure for four years and during that time, I cannot be asked to resign - unless I volunteer to resign."

Sjahril said he's not volunteering to resign.

"If I'm asked to resign by any body now I wouldn't because that would violate the law...and if I resign on the basis of pressure from outside that would mean that I'm making the independence of the central bank non-existing," he said.

He was speaking at a meeting of central bank governors in Singapore co-hosted by the Monetary Authority of Singapore and the Bank for International Settlement.

Sjahril also denied that the central bank was technically bankrupt, defending its policy on helping troubled banks and said it was ready to be investigated.

"We are not technically bankrupt," Sjahril said.

A recent government audit shows Bank Indonesia's finances are now so precarious that it needs an urgent capital injection, and the finance minister has said the International Monetary Fund has agreed to a government proposal to recapitalize the bank.

But Sjahril said the bank had sufficient capital to meet its obligations and that any recapitalization would be small.

The Supreme Audit Agency's (BPK) report said it did not have enough information to reach any final conclusions. But Indonesian President Abdurrahman Wahid has called for Sjahril's sacking.

And economists demand to know more about the bank's finances, warning that the BPK audit could just be the tip of the iceberg.

But Sjahril said the bank had acted according to Indonesia's law for liquidity credit assistance for troubled banks.

"The Supreme Audit has not considered the higher-ranking policy that no bank should be closed," he said, adding that the no-closure policy was extended after the closing of several banks in November 1997, which triggered runs on banks.

Sjahril said Rp 164 trillion (US$23 billion) had been channeled to troubled banks under this policy.

He said that if this had been considered in the audit report -- and added together with government bonds already issued -- the central bank's finances would be shown to be solid.

"Should there be a need (for recapitalisation), the amount would be small," Sjahril said, adding the bank was ready for further investigation.

By law, the government has to inject funds into the central bank should its capital fall below Rp 2 trillion.

On speculation about his resignation, Sjahril said: "It has not come to my mind at any time."