February 23, 2018 / 6:05 AM / a year ago

Indonesia leader seen revealing his choice for central bank governor soon

JAKARTA (Reuters) - Indonesian President Joko Widodo is expected to tell parliament by next week who he wants to start a five-year term as central bank governor in May, people knowledgeable about the matter say.

FILE PHOTO: Logo of Indonesia's central bank, Bank Indonesia, as seen in Jakarta, Indonesia January 19, 2017. REUTERS/Fatima El-Kareem/File Photo

The choice for Bank Indonesia (BI) governor has to be approved by parliament, where Widodo - who has not indicated his preference - has majority support.

Domestic media have reported that a shortlist of possible candidates, given by an adviser to Vice President Jusuf Kalla, has four names: incumbent Governor Agus Martowardojo, planning minister Bambang Brodjonegoro, former finance minister Chatib Basri and a BI deputy governor, Perry Warjiyo.

None of the four have commented.

Johan Budi, a spokesman for the president, has said he was not aware of when a nomination would be submitted.

Officials say the president’s choice will be announced in a plenary meeting some time after parliament on March 5 starts a new session.

Then a “fit and proper” test will be conducted by the committee overseeing finance, as part of a process that could take from a few days or a number of weeks.

A BI governor is allowed to serve two terms.

Martowardojo, a career banker, was appointed as finance minister by then-President Susilo Bambang Yudhoyono in 2010. In 2013, he was Yudhoyono’s sole nominee to be central bank governor.

Analysts say BI’s credibility has improved under his leadership, especially in terms of controlling inflation and safeguarding the rupiah from excessive volatility.

During Martowardojo term, BI made the 7-day reverse repurchase rate its policy interest rate IDCBRR=ECI, replacing another rate that was not tied to money markets.

BI has also revamped policies to improve management of the financial system, including regulations on how banks manage liquidity.

Some analysts feel that the president will want to have a new person to head BI, which by law is independent of the government.

Brodjonegoro, a former dean of University of Indonesia, held senior positions in the Finance Ministry before being appointed finance minister in 2014 by newly-elected Widodo. In 2016, Brodjonegoro was shifted to be planning minister.

Basri served as finance minister under President Yudhoyono and also headed Indonesia’s Investment Coordinating Board.

Warjiyo has been at the central bank since the 1980s. He had a two-year stint as an executive director at the International Monetary Fund.

Additional reporting by Tabita Diela; Writing by Fransiska Nangoy; Editing by Ed Davies and Richard Borsuk

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