Indonesia's finance minister pledged yesterday to uphold the independence of the central bank, after lingering fears about government interference in monetary policy drove the rupiah currency to a record intraday low.
The rupiah recovered from a slide of as much as 0.3 per cent to 16,985 against the dollar, on investor jitters about President Prabowo Subianto’s decision to nominate his nephew as a governor of Bank Indonesia, and overall fiscal health.
“We will maintain the independence of the central bank and the government as much as possible,” Finance Minister Purbaya Yudhi Sadewa Purbaya told journalists. “I will not squeeze the central bank to finance our development programmes.”
The currency has fallen nearly 2pc in January after dropping 3.5pc in 2025. The yield on the 10-year Indonesia government bond was 3.3 basis points higher at 6.33pc, its highest in more than three months.
Purbaya sought to allay market concerns about the currency’s depreciation, saying economic fundamentals remain sound.
“Although the rupiah has weakened, in percentage terms it is only a small amount, so the system should already be accustomed to this,” he said, adding that the impact on the economy was minimal.
Prabowo’s nephew, Thomas Djiwandono, currently a deputy finance minister, is one of three nominees whose names have been submitted to parliament, presidential spokesperson Prasetyo Hadi said on Monday.
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