Indonesia's Foreign Capital Inflows US$6.3B in 1Q 2019
Governor of Bank Indonesia Perry Warjiyo. Photo by TheInsiderStories.

JAKARTA (TheInsiderStories) – President Joko Widodo has reportedly nominated a sole candidate to replace Agus D.W. Martowardojo as Governor of Bank Indonesia: current Deputy Governor Perry Warjiyo, who is also an alumnus of Gadjah Mada University, Yogyakarta circa 1980.

Sofjan Wanandi, the Vice President’s Special Staff member close to this matter, has confirmed the report. Widodo apparently acknowledges Warjiyo’s long experience and expertise in maintaining current monetary policy, according to Wanandi.

Warjiyo has worked for the central bank since 1984, and thus experienced handling several financial crises, including the 1998 catastrophe that forced Indonesia to sign a ‘letter of intent’ with the International Monetary Fund (IMF).

He had been nominated four times for deputy governor since 2009. However, he only secured the position on April 15, 2013.

Born in Sukoharjo, Central Java, in 1959, Perry earned his Master’s and Doctoral degrees in Monetary and International Finance at Iowa State University in 1989 and 1991, respectively.

He has had a long and brilliant career at Bank Indonesia, especially in areas of economic research and monetary policy, international issues, organizational transformation and monetary policy strategy, education and central bank research, foreign exchange and foreign debt management, as well as becoming the Head of Governor’s Bureau.

Prior to serving as Deputy Governor, Perry was Assistant to the Governor for monetary policy and macro-prudential and international affairs. Perry has also played a key role as an Executive Director with the International Monetary Fund, representing 13 country members in the Southeast Asia Voting Group.

In any case, a number of challenges are ready to confront the new BI Governor candidate, among them being maintaining the Rupiah exchange rate and inflation amid persistent global uncertainty. The U.S Central Bank Interest Rate, geopolitical instability in the Middle East and the dynamics of the Korean peninsula exert an influence on the Rupiah exchange rate, according to Taufik Kurniawan, House of Representatives (DPR) Chairman on Economic and Financial Affairs.

Warjiyo is expected to be able to carefully design prudential macro policy, monetary policy and fiscal policy, in order to secure the trust of market participants.

The next challenge is the recent prominence of digital or virtual money, also known as ‘cryptocurrency’. ‘Blockchain’, the underlying technology and innovation behind Bitcoin and ICOs, is in fact one of the most promising emerging technologies of the last decade.

BCA economist David Sumual suggested Warjiyoto maintain his pro-active stance in communicating policies to market participants, as this would help alleviate uncertainty in the market, as well as augmenting the attractiveness of Indonesia, considering the strong fundamentals of the economy.

Earlier, President Widodo received four BI candidates, namely Chatib Basri (former Finance Minister), Bambang Brodjonegoro (Minister of National Development Planning), Perry Warjiyo (BI Deputy Governor) and Agus D.W Martowardojo (current BI Governor).

President Joko Widodo has said that the candidate he will recommend to replace Agus Martowardojo must be trusted by both the market and the general public. Martowardojo is set to retire in May this year.