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Jakarta Post

Protecting BI’s independence

  • Editorial board

    Jakarta

Jakarta   /   Thu, September 10 2020   /  01:00 am
Monetary talks: President Joko “Jokowi” Widodo (left) shares a light moment with Bank Indonesia (BI) Governor Perry Warjiyo on the sidelines of BI annual meeting in Jakarta on Nov. 28, 2019.(Antara/Aditya Pradana Putra)

The House of Representatives’ proposed revisions to the Bank Indonesia (BI) law have shaken the market, which fears the move will compromise the central bank’s independence and, in turn, distort policy-making and harm the economy.   The rupiah depreciated by more than 1.5 percent on Sept. 2, the day when news about the revision made the headlines. The currency has been on a downward trajectory since then. BI’s independence dates back to 1999, during the height of the Asian financial crisis. In order to create credible, accountable and transparent policies to support an economy in deep contraction, the House passed the historic revision of the BI Law. Notable articles include the separation between the central bank and the government, making BI an independent agency whose focus is on maintaining the rupiah’s stability. Around the world, central ban...