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View all search resultsSri Mulyani vows to uphold BI independence amid House-led legal reform
The Finance Minister has vowed to uphold central bank independence and macroprudential capacity amid concerns over proposed revisions to legislation governing Bank Indonesia.
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n response to concerns among economists and market players regarding proposed revisions to legislation on the central bank, Finance Minister Sri Mulyani Indrawati pledged on Sept. 4 that the government would maintain a credible and independent Bank Indonesia (BI) to maintain stability and market trust.
Monetary policy must “remain credible, effective and independent” going forward, the minister stressed, reiterating President Joko “Jokowi” Widodo’s statement earlier last week.
“The government has not yet discussed the revision to the BI laws that was initiated by the House [of Representatives],” she said at a virtual press briefing last Friday.
“The President’s statement is clear that monetary policy must remain credible, effective and independent,” Sri Mulyani said, citing Jokowi’s pledge during a foreign press briefing on Sept. 1.
The House Legislation Body (Baleg) has proposed a bill that revises the 1999 and 2004 laws on the central bank in the biggest legislative shake-up for the monetary authority since 1999.
The draft bill scraps all provisions on central bank independence and gives the government voting rights on monetary policy. Central bank independence was enforced by law in the wake of the 1998 Asian financial crisis to ensure a prudential central bank for the country.
The bill also expands the central bank's mandates as managing the rupiah exchange rate, managing inflation, boosting economic growth and contributing to sustainable job creation. The prevailing laws stipulate only the first two mandates.
