Indonesia’s Central Bank Revamp Plan Is Throwback to 1950s Model

A proposal to establish up a council headed by the finance minister to coordinate Indonesian monetary policy is a throwback to a model that existed for more than four decades before the Asian financial crisis, according to Nomura Holdings Inc.

A monetary council to lead Bank Indonesia in its policies was first set up in 1953 and abolished only in the wake of the Asian financial crisis in 1999 to promote central bank independence, Nomura Singapore Ltd. analysts including Euben Paracuelles and Rangga Cipta wrote in a note Tuesday. The new proposal, still in its early stages, looks like a reversal of this objective, they said.