Warjiyo made Bank Indonesia deputy chief in remix

Indonesian lawmakers approved Perry Warjiyo to become the central bank’s deputy governor for monetary operations, moving closer to filling a post vacant since 2011 as the nation grapples with a falling currency.

Commission XI, a parliamentary panel for financial affairs, considered Warjiyo and Hendar, who goes by one name, for the position yesterday after President Susilo Bambang Yudhoyono submitted them as nominees. Both are Bank Indonesia executive directors for monetary policy, while Warjiyo also oversees economic research. Warjiyo’s appointment will have to be confirmed at a plenary session of parliament.

“He was selected with following notes,” Emir Moeis, chairman of the commission, told reporters after the decision. “Implement macro pru- dential policies that prioritize the people’s economy. Forextransaction and capital-inflow policies must have national interest as their priority. Shortterm capital flow should be limited. Increase and strengthen BI’s role in managing and controlling annual inflation.”

The same committee will also examine the credentials of Finance Minister Agus Martowardojo for the position of governor in less than two weeks. At stake is safeguarding the central bank’s leadership and curbing prolonged vacancies in an institution wrestling with elevated inflation, a trade deficit that widened to a record in October and one of the worst performing currencies in Asia in the past year.

The rupiah’s movement can be managed by intervention, foreign-exchange supply and the formation of a foreign-exchange reference rate, Warjiyo said in Jakarta today. Economic growth is still good and inflation next year will probably be slower, and based on these assumptions there’s no reason to change the Bank Indonesia reference rate, he said.

Indonesia’s political system can pose challenges for speedy central bank succession. Current Governor Darmin Nasution, 64, assumed the top post in September 2010 after more than a year as act- ing leader. It took the president about a year to nominate him after the previous head, Boediono, resigned in May 2009 to become Yudhoyono’s running mate in the presidential election.

The president last month named Martowardojo as his sole candidate to succeed Nasution, whose term ends May 23. The parliamentary committee has agreed to assess the finance minister for the governor’s job on March 25.

The government is targeting economic expansion of 6.5 percent to 6.8 percent this year after gross domestic product rose 6.1 percent last quarter from a year earlier, the slowest pace in more than two years. Indonesia’s inflation accelerated to a 20-month high in February and Southeast Asia’s biggest economy has expanded above 6 percent for the past nine quarters, limiting the central bank’s scope to cut interest rates.