Concerns over Indonesia bank shuffle

Yudhoyono made the surprise announcement on Feb. 22 that he wanted Agus Martowardojo to take over the central bank when the current governor's term expires in May. He has given no explanation for not seeking to extend Governor Darmin Nasution's term.

Nor has there been any explanation why the president wants to move Martowardojo out of the cabinet, and take charge of monetary policy for Southeast Asia's biggest economy.

On Tuesday night, parliament is due to take the first step by deciding whether Yudhoyono's sole candidate for the five-year term is eligible to face the fit and proper test that he must pass to take over the governorship of Bank Indonesia from late May.

The president had proposed Martowardojo for the central bank job before, in 2008, but parliament ruled him ineligible for consideration at the time, in a decision that was seen as a more related to politics than specific objections to Martowardojo.

Some MPs have grumbled that Martowardojo lacks monetary policy skills and question his links to graft cases that have been ripping apart Yudhoyono's ruling Democrat Party. The finance minister has been questioned as a witness over one major scandal, but there has been no suggestion he was involved.

Martowardojo was also in the ministry when Indonesia introduced laws, including a controversial tax on mineral exports, which have attracted warnings that the government may be pushing away foreign investors.

So far, foreign direct investment has been at record highs and a major factor in rapid economic growth.

“We do not expect any immediate changes to the current monetary policy stance. In our view, (the Bank of Indonesia) will remain reluctant to tighten its policy stance,” Nomura wrote in a research note, in reference to the benchmark rate which has been at a record low of 5.75 percent for a year.

1|2|Next Page>>

SHARE CLOSE
Blogger		Google+
Live Journal		Plurk
Stumble Upon

Tweet

	PREVIOUS ARTICLE
	China's richest man sets his sights on foreign projects

NEXT ARTICLE
India rejects Bayer plea against cheap cancer drug

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

 Receive China Post promos
 Respond to this email

Submit