Perry Warjiyo's Resignation is Considered a Severe Blow to the Monetary Sector

JAKARTA - The Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira, assessed Perry Warjiyo's resignation from the position of Governor of the Bank of Indonesia (BI) as a major blow to the Indonesian monetary sector.

According to him, the decision is regrettable considering that Perry's term of office actually lasts until May 2028.

"In fact, the term of office still ends in May 2028. It seems that there is political pressure so that Perry steps down and this has been felt since the rupiah weakened at the end of 2025," he explained to VOI, Monday, July 27.

According to him, the problems faced at that time were more sourced from fiscal policies, such as widening the state budget deficit, implementing the Free Nutritious Meal (MBG) and Village Cooperative (Kopdes) programs which were considered to have less mature planning.

In addition, he added that the weakening tax revenue and the increase in government debt were considered to further increase Indonesia's risk profile in the eyes of investors.

"The negative outlook for debt ratings from Moody's and Fitch is also an implication of fiscal governance. But the blame is on Bank Indonesia for failing to maintain exchange rate stability and maintaining investor confidence," he explained.

He also argued that the intervention of fiscal authorities in monetary policy had exceeded the limits of the supposed synergy.

Bhima also highlighted the impact of the enactment of the revision of the Financial Sector Development and Strengthening Law (UU P2SK) and the Indonesian International Financial Center Law (UU PFII).

According to him, the provision regarding the immunity of Patriot Bond in the P2SK Law has the potential to reduce the authority of the BI in regulating foreign exchange traffic and overseeing cross-border financial transactions.

Meanwhile, he added that the existence of a special area in the PFII Law that has its own financial supervisory authority is considered not only to have an impact on the Financial Services Authority (OJK), but also has the potential to reduce the authority of Bank Indonesia.

"In the Indonesian International Financial Center (PFII) Law, there is a special area where the financial supervisory authority is separated. Even though it seems that OJK is affected, BI's authority is also reduced," he said.

Furthermore, Bhima reminded that the biggest challenge after Perry Warjiyo's resignation was to maintain the independence of Bank Indonesia.

He assessed that efforts to restore investor confidence would not be easy if the direction of monetary policy was considered to be under the control of the government.

According to him, as long as political pressure on BI is still ongoing, anyone who replaces Perry Warjiyo from within the ranks has the potential to face similar challenges.