"BI needs a figure like Agus who has good governance for its future polices."Jakarta (ANTARA News) - Economic observers and bankers have given positive response to the election of current Finance Minister Agus Martowardojo as new governor of Bank Indonesia (BI/the central bank).
He is considered to be the ideal figure to lead the central bank and his election is expected to provide positive impact on BI performance and create stimulus to national economy.
"Agus Martowardojo so far has a positive track record in the banking and financial industries. So, he is an ideal figure to lead BI," Rully Nova, financial market analyst of Bank Himpunan Saudara, said.
As a finance minister, Agus with good vision and mission similar to outgoing BI Governor Darmin Nasution, has good understanding on how to make the fiscal and real sectors run well in Indonesia.
"He is a figure who has the good governance capacity which is needed by BI to produce monetary policies for maintaining domestic economic stability," Rully said.
Finance Minister Agus Martowardojo was elected BI new governor by the House of Representatives (DPR)`s Commission XI on financial affairs on Tuesday.
He will take up his new post in May for the 2013-2018 period to replace outgoing BI Governor Darmin Nasution who will end his term on May 22, 2013.
Economist Destry Damayanti of Bank Mandiri said the new BI governor would give positive impact to BI performance because he had high integrity and good governance capacity.
She said Agus had proved that he had good governance in leading the finance ministry where he had obtained the unqualified opinion from the state audit board (BPK).
The new BI governor has the courage to break problems in the finance ministry by improving the taxation system and clean the state institution from bad tax officials. He dared to break the problem faced by the ministry in the tax sector.
"BI needs a figure like Agus who has good governance for its future polices," Destry said.
As a banker, the new BI governor who is a former president director of Bank Mandiri, has a good macro-prudential capacity he has shown as a finance minister.
"From the macro-prudential aspect, BI will deal with fiscal problems. After all, state debenture is now a financial instrument of BI which will concern fiscal policies. Agus has the expertise to see the implications of policies in the fiscal sector," Destry said.
Besides his capacity in the macro-economic aspect, the new BI governor also has capability in the micro-economic sector, particularly in the banking sector.
"Moreover, BI and the Financial Service Authority (OJK) will be related with each other in the macro-prudential policy sector in the future. Agus`s experience as a banker will be very helpful in seeing the impact of a macro policy to the micro-economic sector," she said.
The OJK has been established to handle micro-prudential problems like the banking sector.
According to Sigit Pramono, general chairman of the Indonesian Banks Association (Perbanas), the new BI governor have three big challenges that he will have to face.
The first challenge is linked to BI`s task following the establishment of the new Financial Service Authorities (OJK) which will certainly. "With the presence of the OJK, BI will focus on dealing with macro-prudential problems and will no longer regulate and monitor banks," he added.
The second challenge is, he said, the BI governor along with the finance minister, the OJK chief and the head of the Deposit Insurance Agency (LPS), would be responsible for maintaining the stability of the financial system through the Financial System Stability Forum (FKSSK).
"The task is held during normal situation and financial crisis. The task of the BI governor has been confirmed in the OJK law," he added.
Pramono said the third challenge would be securing the transition process of Bank Indonesia`s tasks to OJK.
Therefore, Perbanas hopes, he said, that Agus Martowardojo`s election as the new central bank governor would bring a positive stimulus to national economy and increase central bank`s understanding of the national banking industry.
"With the positive stimulus investment atmosphere is expected to be brighter and as Agus hails from banking industry he is expected to be able to improve Bank Indonesia understands of the industry," Sigit Pramono said.
With regard to challenges facing the new BI head, outgoing BI Governor Darmin Nasution said there were still lots of homework that must be done by newly elected BI governor in the coming five years.
"I will tell him (Agus) about the homework that has to be done. I will talk to him," Darmin Nasution who will end his term of office as the central bank governor on May 22, 2013, said.
Darmin said that among the homework that should be accomplished by the new governor included meeting inflation target, exchange rate of the local rupiah currency, payment system and financial inclusion for the people.
Destry Damayanti meanwhile acknowledged that maintaining economic and the rupiah exchange rate stability was homework for the new BI governor. This is because fluctuations in the financial markets would continue to take place.
"Developments ahead will certainly have impact on the economic and rupiah stability. BI should have correct strategies to stabilize currency volatility," she said.
Rully shared Destry`s opinion saying that the new BI governor must be able to manage the rupiah exchange rate fluctuations against the US dollar currency.
"The rupiah fluctuation has enough sensitivity that could affect Indonesia`s trade balance and its exports and imports. The rupiah stability must be maintained," he said.
However, Rully is convinced that Agus has good governance which is needed by BI to produce monetary policies to maintain domestic economic stability.
"After all, Agus is popular among foreign investors and this will be a good point for him to attract capital inflow into Indonesia," Rully said.***3***
(T.A014/b003/B003)
(T.A014/A/A014/B003) 28-03-2013 16:54:07
Reporter: Andi Abdussalam
Editor: Priyambodo RH
Copyright © ANTARA 2013
