Hendar Named Deputy Governor as Bank Indonesia Fills Top Jobs

Indonesian lawmakers chose Hendar as central bank deputy governor, moving to fill remaining vacancies in the management team as the authority grapples with accelerating inflation, slowing growth and a falling currency.

Commission XI, a parliamentary panel for financial affairs, selected Hendar after a vote at a meeting late yesterday in Jakarta, said Commission Chairman Emir Moeis. Hendar, currently an assistant governor at Bank Indonesia, received 24 votes, he said. Treesna Wilda Suparyono, director of the foreign-exchange management department, got 18 votes, while the third candidate, Mulya Siregar, also an assistant governor, received five votes.

The appointment will have to be confirmed at a plenary session of parliament.

Indonesia in June became the region’s first major economy to boost interest rates this year, as policy makers sought to shore up one of Asia’s worst performing currencies in the past 12 months and cool inflation expectations. Foreign-exchange reserves fell to a more than two-year low last month as the central bank intervened to support the rupiah, adding pressure for further monetary tightening as the authority meets this week.

The rupiah declined 0.1 percent to 9,955 per dollar in Jakarta yesterday, prices compiled by Bloomberg from local banks show. It has fallen about 5 percent in the past 12 months, the worst performer among 11 Asian currencies after the yen and the Indian rupee.

Monetary Ability

“It will be useful if parliament names a person who has the ability to manage monetary policy,” Juniman, an economist at PT Bank Internasional Indonesia, said before the decision. “Hendar is a good person who will be able to support” Governor Agus Martowardojo together with Deputy Governor Perry Warjiyo, he said.

The authority will probably raise the benchmark reference rate by a quarter of percentage point for a second straight meeting to 6.25 percent on July 11, a Bloomberg survey shows.

The country’s reserves fell to $98.1 billion last month from $105.15 billion in May, Bank Indonesia Governor Agus Martowardojo said last week. The central bank has trimmed its 2013 economic growth forecast and lifted its outlook for inflation to 7.2 percent to 7.8 percent, Martowardojo also said.

The parliamentary committee assessed the three candidates last week to replace Muliaman Hadad, who resigned from his second term as deputy governor after parliament named him head of the Financial Services Authority in June last year. Bank Indonesia is due to hand over its banking supervisory role to the new authority, which will oversee lenders starting next year.

Hendar, 55, has a Master’s degree in development economics from Williams College in the U.S. This was Hendar’s second attempt at becoming deputy governor this year, after losing out to Perry Warjiyo for a similar role in March. He has been a bureau chief of monetary policy, executive director of monetary management, and is currently an assistant governor specializing in payment systems, money circulation and information system management at the central bank.

To contact the reporters on this story: Novrida Manurung in Jakarta at nmanurung@bloomberg.net; Widya Utami in Jakarta at wutami@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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