Indonesia's Central Bank Faces New Leadership Shake-Up

Indonesia's central bank, Bank Indonesia (BI), is in the spotlight again. The president, Prabowo Subianto, has picked his nephew, Thomas Djiwandono, for a top role. This move has raised eyebrows, especially since Djiwandono isn't your typical central banker. He's a former businessman and current deputy finance minister. Some worry this could make the bank less independent. The concern is real. Investors are already nervous about the bank's ability to make decisions without government pressure. Prabowo has big plans to boost the economy to 8% growth by 2029. That's a huge jump from the current 5%. To hit that target, the government might need the central bank's help. Last year, BI already made a deal to fund some government programs. This didn't sit well with everyone. Now, with Djiwandono on the board, some wonder if the bank will stay focused on its main job: keeping inflation in check and the economy stable.Djiwandono is set to replace Juda Agung, a current BI board member. He'll need to pass a fit-and-proper test by parliament first. If he does, he'll join the board, which decides key interest rates and policies. Typically, these roles go to career central bankers or economists. Djiwandono's background is different, which has some people questioning his appointment. The move comes as parliament discusses a bill to strengthen the central bank's role in economic growth. Some see this as a good thing. Others worry it could blur the lines between the bank's duties and the government's wishes. Meanwhile, BI is set to hold its next monetary policy review soon. The outcome could give clues about how the bank plans to handle the new leadership changes.