(Corrects to give full name of member of parliament, Mukhamad Misbakhun, in paragraph 10 and corrects deputy speaker’s name to Mustopa in paragraph 4)
JAKARTA, Jan 27 (Reuters) – Indonesia’s parliament on Tuesday appointed President Prabowo Subianto’s nephew, Thomas Djiwandono, as a deputy governor of the central bank, adding to concerns about the institution’s operational independence.
The decision was unanimously agreed during the House’s plenary session on Tuesday, said deputy house speaker Saan Mustopa.
On Monday, a parliamentary commission overseeing finance had endorsed Thomas as the new deputy governor, eliminating two other career central bankers.
“Hopefully this mandate can be carried out with integrity and wisdom also give significant contribution in strengthening monetary policy, maintaining financial stability, and supporting sustainable economic growth,” Mustopa said.
After the appointment, Thomas will be formally sworn in by the Supreme Court, though the timing is still unclear.
Thomas’s nomination had already sparked investor concerns about the independence of Bank Indonesia, driving the rupiah to a record low of 16,985 per dollar last week. It later recovered after BI kept rates unchanged in an effort to shore up the currency.
When asked about the market’s concerns on Monday, Thomas said he can only be judged on his work, adding that he had already resigned from Prabowo’s Gerindra party in December.
He also emphasised the importance of “synergy” between the central bank, fiscal policymakers and other authorities in supporting the country’s economic growth. But he stressed that nothing should compromise the central bank’s independence.
“The law (which regulates) Bank Indonesia’s independence is very strong,” he said. “Second, I went through all the processes required by the law.”
Mukhamad Misbakhun, the head of the parliamentary commission overseeing finance, said on Monday that Thomas was approved because he was seen as a figure who “can be accepted by all parties” and has the vision of creating synergy between fiscal and monetary policies.
(Reporting by Ananda Teresia and Fransiska Nangoy; Editing by Thomas Derpinghaus and David Stanway)
