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Jakarta Post

‘Bill will push central bank into dark age’: Experts voice concerns over BI Laws revision

  • Adrian Wail Akhlas

    The Jakarta Post

PREMIUM
Jakarta   /   Fri, September 4, 2020   /  07:45 am
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The logo of Bank Indonesia is seen in front of the central bank's building in Jakarta. Experts and rating agencies have voiced their concerns over the recent draft revision of the Bank Indonesia (BI) Law, which is feared will undermine the central bank’s independence and prudence amid the economic risks the country faces during the COVID-19 pandemic.(JP/Rafaela Chandra)

Experts and rating agency have voiced their concerns over the recent draft revision of the Bank Indonesia (BI) Laws, which is feared will undermine the central bank’s independence and prudence amid the economic risks the country faces during the COVID-19 pandemic. The bill, which was proposed by the House of Representatives’ legislation body, states that the central bank’s mandate will be to manage the rupiah exchange rate and inflation as well as boosting economic growth and helping to ensure sustainable job creation. The prevailing laws mandate BI to manage inflation and the rupiah exchange rate. The draft revision also scraps all existing articles stipulating BI’s independence in monetary policy making, which it was granted in the wake of the Asian financial crisis to help ensure the country had a prudent central bank. Instead, the draft revision requires...