22 October 2019 (closed)
USD/IDR (14,051) -7.00 -0.05%
EUR/IDR (15,625) -53.48 -0.34%
Jakarta Composite Index (6,225.50) +26.51 +0.43%
Current Finance minister Agus Martowardojo is approved by Indonesia's Parliament (DPR) to replace Darmin Nasution as governor of Indonesia's central bank (Bank Indonesia) in May 2013. Martowardojo, who has been active in banking for over two decades and had a successful term as head of state-controlled Bank Mandiri, was finance minister since May 2010 after taking over from Sri Mulyani, who was pressured out of Indonesian politics.
About a month ago, when president Susilo Bambang Yudhoyono nominated Martowardojo for the position of central bank governor, it was received with some surprise and suspicion. Market participants and investors were content with the performance of Martowardojo - known as a reformist politician - as Finance minister. Moreover, incumbent governor Nasution has succeeded in fostering a stable and conducive financial climate (despite the current trade deficit and subsequent fall in the IDR rupiah). Analysts therefore questioned the need for change at this stage. Some regard Martowardojo's nomination for the position of central bank governor as a way to remove him from the finance post as he had been stubborn to deny participation of certain private businesses in the construction of the Sunda Strait Bridge (a mega project that will connect Indonesia's two most populous islands of Java and Sumatra). This project is expected to start in 2014.
It is expected that there will be no sudden policy changes after Martowardojo replaces Nasution at the top position of Indonesia's central bank. In line with the role of the central bank, Martowardojo stated that his priorities will be to maintain a stable exchange rate as well as keeping inflation in check.
Amsterdam-born Martowardojo, 57, had been a candidate for the position of central bank governor in 2008 but failed to pass the fit and proper test. It is still unclear who will replace Martowardojo as the new Finance minister.