BENGALURU: The Indonesian rupiah extended gains to a more than seven-week high and stocks reversed course on Monday after President Prabowo Subianto nominated Destry Damayanti as the sole candidate to be the next central bank governor.
Destry, Bank Indonesia’s second-most senior official, has been serving as interim governor since July 27, after the sudden departure of Perry Warjiyo reignited anxiety over Indonesia’s fiscal policy and central bank independence.
“Deputy Governor Destry assumed office (as the acting chief) armed with extensive experience across macroeconomics, banking, capital markets, and financial-sector policy, besides being a key contributor to Bank Indonesia’s existing policy framework,” said DBS Bank economist Radhika Rao.
The rupiah, which rose to an intraday high of 17,730 per dollar, has advanced about 1.3 percent over the last four sessions after data showed that Indonesia’s growth beat expectations, albeit at its weakest pace in three quarters. The currency had ended at 17,885 on Friday.
Stocks in Jakarta edged 0.2 percent higher after losing as much as 0.6 percent earlier in the session.
Wider Asian markets also edged higher, led by regional technology-heavy benchmarks after soft US jobs data eased expectations for a rate hike from the Federal Reserve. MSCI’s gauge of EM Asia stocks rose about 0.9 percent, while the EM Asia IT index added 1 percent. Both indexes are heavily influenced by chipmaker-heavy South Korea’s KOSPI and Taiwan’s benchmark, which closed up 0.7 percent and 1.6 percent, respectively.