Destry seen as frontrunner for Bank Indonesia governor

Bank Indonesia (BI) senior deputy governor Destry Damayanti is seen as the frontrunner to lead the central bank, according to two sources familiar with the matter.

A second source confirmed that Destry's name was on a list of candidates Prabowo Subianto's office had submitted to parliament, but was one of multiple names.

Investors are closely monitoring the nomination process after BI governor Perry Warjiyo resigned suddenly late last month for personal reasons.

The government thinks it needs to provide certainty for the market by moving quickly with the nomination, with the formal process in parliament expected to begin after lawmakers return from recess on Aug 14, said the first source, who declined to be named because of the sensitivity of the matter.

"Destry is the frontrunner," the person said, noting she was considered someone markets were comfortable with, and that she got along well with both finance minister Purbaya Yudhi Sadewa and Prabowo.

The second source confirmed that so-called "fit and proper" tests for candidates would begin when parliament returned from recess.

Destry, the parliamentary speaker and a spokesman for the president did not respond to requests for comment. A spokesman for the central bank said they could not comment because parliament would make the decision.

Goal to boost growth

Warjiyo's surprise departure reignited concerns over independent policymaking at BI, which has been under pressure to support Prabowo's goal of boosting growth to 8% from around 5% now.

The effort has been complicated by a plunging rupiah amid capital outflows triggered by worries about fiscal management, central bank autonomy, transparency issues with Indonesia's equity market, and a lack of investor appetite for risky assets due to the Middle East conflict.

Destry, 62, has been senior deputy governor since 2019 and was BI's second most senior official when Warjiyo resigned. She began her career as an economist and previously worked at Citibank and state lender Bank Mandiri. She holds a master's degree from Cornell University and sat on the board of commissioners for the Deposit Insurer corporation between 2015 and 2019.

Fellow BI deputy governor Aida Budiman would be nominated for the No. 2 job, the first source said. Aida did not respond to a request for comment.

Prabowo may submit up to three names, but since 2010 his predecessors have nominated only one, all of whom secured lawmakers' approval. Parliament, controlled by Prabowo's big-tent coalition, has one month to approve or reject the candidates. It was not clear whether the new governor would serve a full five-year term or the remainder of Warjiyo's tenure, which expires in 2028.

BI raised interest rates by 100 basis points in three moves over May and June to stem the rupiah's decline, after it fell to a record low of 18,190 against the dollar on June 8. Before Warjiyo's departure, BI and the finance ministry had for months disagreed over liquidity policies. The first source said no particular policy changes were expected from the new BI chief, but the government hoped cooperation would improve.