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Reuters

Indonesian President Prabowo Subianto has nominated his nephew to join the central bank’s board of governors, two sources said, amid growing concern about its independence as the government seeks more support for ambitious economic targets.
Investors have worried that independent monetary policymaking in Southeast Asia’s largest economy might be under pressure as Prabowo targets economic growth of 8 per cent by 2029, ⁠from about 5 per cent now.
Those fears grew after Bank Indonesia (BI) unveiled a new burden-sharing deal last year to fund some government programmes.
Thomas Djiwandono, a deputy finance minister who is a former businessman, would soon face a fit-and-proper test by parliament for the new job, said the two sources, who sought anonymity as they were not authorised to speak to the media.
The US-educated Thomas would replace current BI board member Juda Agung, one of the sources added.
Thomas, as well as Prabowo’s office, declined to comment.

The bank is set to hold its next monthly monetary policy review later this week.
Each member of the bank’s board, comprised of a governor and several deputy governors, has a voting right to decide key interest rate levels and determines BI’s policy.
Members are usually career central bankers, economists or former executives of commercial banks appointed by the president with parliamentary approval.
Domestic media IDNFinancials also reported the appointment, citing a source who said Djiwandono was expected to take up the new post in February, barring last-minute changes.
Last year, Thomas attended at least one central bank monetary policy review as a representative of the finance minister, but did not have the right to vote.
The move comes as parliament discusses a bill with provisions to strengthen the central bank’s role in supporting economic growth.
Meanwhile, Indonesia’s new sovereign wealth fund, Danantara, plans to raise 20 trillion rupiah (US$1.2 billion) in the first half via a fresh round of so-called patriot bonds, according to people familiar with the matter.
The fundraising would be the second such capital grab after a similar bond sale late last year. The notes’ coupon is expected to be less than market rates, the people said, requesting not to be named because the information was private. Discussions were ongoing and terms might change, they added.
During the previous round, Danantara issued five- and seven-year bonds with a coupon of around 2 per cent. Seven-year Indonesia government bonds are currently yielding about 6.2 per cent.


Although the first round initially targeted US$3.1 billion, ultimately US$3.6 billion was raised after some additional notes were sold, the people said.
Representatives for Danantara did not immediately respond to a request for comment.
Selling patriot bonds to raise money was part of Danantara’s presentation to Prabowo Subianto earlier this month.
Danantara is seeking additional capital as it prepares to step up both domestic and international investments. The fund, seen by Prabowo as a key vehicle to drive his economic growth ambitions, has thus far collected an estimated US$5 billion in dividends from state-owned enterprises that have been shifted under its supervision.
Tapping tycoons for a second round of patriot bonds is likely to add to the anxiety Indonesia’s wealthy are feeling, having already been unnerved by the administration’s crackdown on the affluent.
Patriot bonds are seen as another of Prabowo’s attempts to lean on rich individuals to help his nation building efforts and support his welfare policies, which range from free lunches for schoolchildren to low cost housing.
Indonesia is home to some of the richest men and women in Southeast Asia, with the 10 wealthiest people having a combined net worth of more than US$180 billion.
Additional reporting by Bloomberg


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Thomas Djiwandono’s nomination comes amid fears that monetary policy autonomy may fall victim to the president’s ambitious economic targets


Thomas Djiwandono’s nomination comes amid fears that monetary policy autonomy may fall victim to the president’s ambitious economic targets.


Central banks

Prabowo Subianto

Sovereign wealth fund

Danantara

Prabowo nominates nephew to Bank Indonesia board amid independence fears

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Thomas Djiwandono’s nomination comes amid fears that monetary policy autonomy may fall victim to the president’s ambitious economic targets

Thomas Djiwandono’s nomination comes amid fears that monetary policy autonomy may fall victim to the president’s ambitious economic targets