JAKARTA :Indonesia’s parliament is discussing changes to an existing bill that could strengthen the requirement of the central bank to support growth and also give parliament the power to recommend the removal of the central bank governor, a lawmaker said on Tuesday.
Parliament’s financial commission is looking at changes to a 2023 financial sector law, after the Constitutional Court ordered lawmakers to review the legislation on matters related to the independence of the state deposit insurer agency.
Local news website Kontan on Tuesday reported a draft of the revised bill includes an additional clause saying that Bank Indonesia “in achieving its goals, implements policy and policy mixes that create an economic environment conducive to real sector growth and job creation.”
Mohamad Hekal, deputy head of the parliamentary commission, would not comment on changes to BI’s mandate beyond saying the bill would emphasise its role supporting growth, but said other changes, including on the dismissal of the central bank’s board of governors, were being discussed.
Allowing parliament to evaluate BI’s board members and recommend to the president that a member be removed based on performance were among the changes being considered, he said.
Currently, board members can only be removed if they resign, are convicted of a crime or they are mentally or physically unable to perform their duties.
The 2023 financial law widened BI’s mandate to include supporting sustainable economic growth. Prior to that, the central bank’s sole goal was maintaining the value of the rupiah, which had been understood to include curbing inflation.
BI and the finance ministry, which typically leads discussion with parliament on financial bills, did not respond to requests for comment.
In March, when there was talk about changes to the law, BI Governor Perry Warjiyo said any revisions would emphasise how BI pursued its objective, without changing the construction of the law.
Concern about central bank independence has been rising this month after the announcement of a “burden sharing” deal that will see BI increase the interest it pays on government deposits to fund state programmes, and the sacking of respected finance minister Sri Mulyani Indrawati.
