Indonesia in turmoil: Central Bank governor resigns
The resignation of Warjiyo, one of Asia’s most experienced central bankers, was announced during a press conference which the 67-year-old economist did not attend. His post will be filled on a temporary basis by Deputy Governor Destry Damayanti
from our correspondent Marco Masciaga
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NEW DELHI - The recent, tentative return of investor confidence in the Indonesian economy was seriously undermined today, 27 July, by the sudden resignation ‘for personal reasons’ of central bank governor Perry Warjiyo, who is regarded as one of the key figures in keeping President Prabowo Subianto’s populist tendencies in check.
The resignation of Warjiyo, one of Asia’s most experienced central bankers, was announced during a press conference which the 67-year-old economist did not attend. His post will be filled on a temporary basis by Deputy Governor Destry Damayanti. Investors reacted nervously to the news: the stock market closed slightly lower, yields on 10-year bonds rose by 4 basis points and the Indonesian rupiah – which is down by around 7 per cent compared with December 2025 – lost a further 0.3 per cent against the dollar. “If investors were to believe that Bank Indonesia’s monetary policy is losing its independence and credibility, the rupiah and Indonesian financial markets could come under significant pressure,” explains Daniel Tan, portfolio manager at Grasshopper Asset Management.
Warjiyo’s resignation comes at a delicate time for Bank Indonesia, following President Prabowo’s appointment of his nephew as deputy governor last January and Parliament’s decision in June to curtail the central bank’s autonomy, tying its mandate more closely to economic growth – one of Prabowo’s key priorities.
“That law has significantly eroded the institutional barrier separating Bank Indonesia, the government and Parliament,” explains Liza Camelia Suryanata, head of research at PT Kiwoom Sekuritas Indonesia. Prabowo’s growth targets have been made more difficult to achieve by the energy crisis and a currency that continues to weaken despite interest rate rises totalling 100 basis points over the course of a few months.
Warjiyo’s resignation comes after the departure, last September, of Finance Minister Sri Mulyani Indrawati, another figure who enjoyed the confidence of foreign investors.
