Indonesia New Central Bank Deputy Governer Impact The Market

Recently Perry Warjiyo was sworn in as the new central bank deputy governor of Indonesia. He will be in charge from 2018 to 2023 replacing Agus Martowardojo, the previous deputy governor. This turnover is inseparable from the current Indonesian economy and is driven by significant rupiah depreciation.

This change is welcomed by the market and provides a positive sentiment. Proven on the first day he was in charge, rupiah strengthened to 14,042.48 at the time of closing. This condition is happening due to Perry’s statement and promise to stabilize the rupiah through new policies, and one of them is the interest rate policy.

The strengthening of the rupiah will have a good impact on most sectors of the market because of the lower the operational cost would be. The sectors that will impact the most are the one that is dependent on imported raw materials such as pharmaceuticals, retail, steel and primary industries.

The new central bank deputy governor also gives a positive sentiment to JCI as it rises back close to 6.000 recently. According to the Director of Research Center of Reform on Economy (CORE) Indonesia, Piter Abdullah Redjalam, increases in JCI today is more influenced by domestic sentiment rather than sentiments abroad. Investors are very concerned about the direction of Bank Indonesia’s policy under the new governor’s leadership.

Leave a Reply