Indonesia central bank has full autonomy over interest rates, new chief says

[JAKARTA] Indonesia’s central bank has full autonomy to determine the level of its policy rates even though it is working more closely and in “synergy” with the government, its new chief, Destry Damayanti, said on Monday (Oct 12).

She took over as Bank Indonesia (BI) governor in September following the surprise resignation of her predecessor in late July.

Coordination to ensure that fiscal and monetary policymakers are heading in the same direction will bode well for the economy, she told Reuters.

Though the government has been invited to attend a part of BI’s monthly monetary policy review, and Destry herself participates in meetings with President Prabowo Subianto, the government has no say in BI’s interest rate policy, she said.

“When we’re about to make a policy decision – whether to raise or lower interest rates or to use other incentives – we have full authority to make that decision,” she said.

Political interference at BI has been among investor concerns about Indonesia, and one of the reasons why the rupiah has been emerging as Asia’s worst performing currency.

SEE ALSO

Indonesia’s Destry wins parliament’s backing as central bank chief, to prioritise stability

Indonesian consumer firms brace for more earnings pressure as rupiah weakens

Indonesia's Prabowo nominates nephew as central bank deputy governor

The Business Times turns 50

Five decades of milestones and moments that shaped Singapore’s success story - told through our headlines.

Explore BT50»

In 2026, the Indonesian parliament also widened the bank’s mandate to emphasise its role in promoting economic growth.

Investors have been worried about Indonesia’s fiscal health, changes in its export policies and transparency issues in the stock market.

From May to June, BI raised interest rates by a total of 100 basis points to defend the rupiah, which fell to its weakest in history in June. At the time, Destry was part of BI’s board as the bank’s second most senior official. REUTERS