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Proposed Bank Indonesia expanded mandate worries critics

There are some concerns raised by the Indonesian parliament’s move to widen the central bank’s mandate. Critics fear the legislative move may undermine the bank’s independence. The proposed Development and Strengthening of Financial Sector Bill specifies that Bank Indonesia (BI) is an independent agency and widens its mandate to include maintaining financial system stability to support sustainable economic growth. Concerns raised by the bill include whether it could open the door to politicians joining the bank’s board, and whether the bank could be pressured to stimulate growth. But Finance Minister Sri Mulyani Indrawati clarified that the bill would instead strengthen the independence of BI and other regulators. She also insisted that it would not compromise the central bank’s decision-making.


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