President Susilo Bambang Yudhoyono’s surprise choice of Agus Martowardojo to run Indonesia’s central bank met with mixed reactions, with some questioning his record as finance minister and others praising his banking experience.
Yudhoyono nominated Martowardojo as his only candidate to succeed Bank Indonesia Governor Darmin Nasution when his term ends May 23.
Martowardojo, 57, former president director of PT Bank Mandiri, was rejected for the top central bank post by the parliament’s finance committee when Yudhoyono picked him in 2008.
“He is a very experienced senior banker,” Eugene Galbraith, deputy president director of Bank Central Asia, the country’s biggest bank by market value, said in a mobile-phone text message.
“He has done well as finance minister and now combines top-level knowledge of both the government regulators and the banking community.”
At the same time, PT Samuel Sekuritas economist Lana Soelistianingsih doubts Martowardojo’s ability to shepherd Southeast Asia’s biggest economy as it faces a weakening currency, a widening current-account deficit and inflation stemming from power tariff increases and higher wages.
The parliament’s finance committee will conduct a so-called fit-and- proper test on Martowardojo before he can be approved by lawmakers in a plenary meeting. “This is like, we need a cardiologist but the president gives us a dentist,” Jakarta-based Soelistianingsih said in a phone interview.
“He failed to reach 2012 budget assumptions such as GDP growth target, budget deficit, rupiah level, oil lifting, slow government spending. This shows he has no knowledge of macroeconomics even though he was a good banker.”
Martowardojo replaced former Finance Minister Sri Mulyani Indrawati in May 2010, when Mulyani joined the World Bank as a managing director.
“Parliament will decide whether we will receive Martowardojo’s nomination for the next governor,” Harry Azhar Azis, vice chairman of the finance committee, said Feb. 22.
“We realize that the previous finance committee rejected Martowardojo’s candidacy for Bank Indonesia Governor. This time it will depend on the fit and proper test.”
Career
Martowardojo started his career at Bank of America Corp., according to the Finance Ministry’s website.
He was president director of PT Bank Mandiri, the country’s largest lender by assets, before becoming finance minister Nasution, 64, assumed the central bank governor post in September 2010 after more than a year as acting governor.
He has a doctorate in economics from University of Paris, Sorbonne, France, and is the 14th governor in the central bank’s six- decade history.
He became acting governor after Vice President Boediono resigned in May 2009 to become Yudhoyono’s running mate in the last presidential election. During Nasution’s tenure, one of his deputy governors was the target of probes into a 2008 bailout of PT Bank Century.
Budi Mulya was under investigation by the state auditor regarding a “personal” 1 billion rupiah ($103,000) loan he obtained from the former owner of Bank Century.
The deputy governor was relieved of his role as head of monetary policy operations and his term ended last year.
Reference Rate
The central bank this month kept its reference rate unchanged for a 12th meeting at a record-low 5.75 percent.
The central bank has stepped up intervention to support the rupiah and narrow the gap between local and overseas prices, Hendar, executive director for monetary policy at the central bank, said in a Jan. 28 interview.
Bank Indonesia may take action on its benchmark rate if the currency’s depreciation causes inflation to accelerate, Deputy Governor Hartadi Sarwono said last month. The economy expanded 6.11 percent last quarter, the slowest pace in more than two years.
“Leadership and continuity are important for BI,” said President Director Bank Danamon Indonesia Henry Ho in Jakarta last week. “So far, the central bank has done a very good job, working with the banks, working with many issues in the economy. We want to see Indonesia continue to grow.”
bloomberg.com
Yudhoyono nominated Martowardojo as his only candidate to succeed Bank Indonesia Governor Darmin Nasution when his term ends May 23.
Martowardojo, 57, former president director of PT Bank Mandiri, was rejected for the top central bank post by the parliament’s finance committee when Yudhoyono picked him in 2008.
“He is a very experienced senior banker,” Eugene Galbraith, deputy president director of Bank Central Asia, the country’s biggest bank by market value, said in a mobile-phone text message.
“He has done well as finance minister and now combines top-level knowledge of both the government regulators and the banking community.”
At the same time, PT Samuel Sekuritas economist Lana Soelistianingsih doubts Martowardojo’s ability to shepherd Southeast Asia’s biggest economy as it faces a weakening currency, a widening current-account deficit and inflation stemming from power tariff increases and higher wages.
The parliament’s finance committee will conduct a so-called fit-and- proper test on Martowardojo before he can be approved by lawmakers in a plenary meeting. “This is like, we need a cardiologist but the president gives us a dentist,” Jakarta-based Soelistianingsih said in a phone interview.
“He failed to reach 2012 budget assumptions such as GDP growth target, budget deficit, rupiah level, oil lifting, slow government spending. This shows he has no knowledge of macroeconomics even though he was a good banker.”
Martowardojo replaced former Finance Minister Sri Mulyani Indrawati in May 2010, when Mulyani joined the World Bank as a managing director.
“Parliament will decide whether we will receive Martowardojo’s nomination for the next governor,” Harry Azhar Azis, vice chairman of the finance committee, said Feb. 22.
“We realize that the previous finance committee rejected Martowardojo’s candidacy for Bank Indonesia Governor. This time it will depend on the fit and proper test.”
Career
Martowardojo started his career at Bank of America Corp., according to the Finance Ministry’s website.
He was president director of PT Bank Mandiri, the country’s largest lender by assets, before becoming finance minister Nasution, 64, assumed the central bank governor post in September 2010 after more than a year as acting governor.
He has a doctorate in economics from University of Paris, Sorbonne, France, and is the 14th governor in the central bank’s six- decade history.
He became acting governor after Vice President Boediono resigned in May 2009 to become Yudhoyono’s running mate in the last presidential election. During Nasution’s tenure, one of his deputy governors was the target of probes into a 2008 bailout of PT Bank Century.
Budi Mulya was under investigation by the state auditor regarding a “personal” 1 billion rupiah ($103,000) loan he obtained from the former owner of Bank Century.
The deputy governor was relieved of his role as head of monetary policy operations and his term ended last year.
Reference Rate
The central bank this month kept its reference rate unchanged for a 12th meeting at a record-low 5.75 percent.
The central bank has stepped up intervention to support the rupiah and narrow the gap between local and overseas prices, Hendar, executive director for monetary policy at the central bank, said in a Jan. 28 interview.
Bank Indonesia may take action on its benchmark rate if the currency’s depreciation causes inflation to accelerate, Deputy Governor Hartadi Sarwono said last month. The economy expanded 6.11 percent last quarter, the slowest pace in more than two years.
“Leadership and continuity are important for BI,” said President Director Bank Danamon Indonesia Henry Ho in Jakarta last week. “So far, the central bank has done a very good job, working with the banks, working with many issues in the economy. We want to see Indonesia continue to grow.”
bloomberg.com
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