Indonesia close to appointing new central bank chief

Bank Indonesia Acting Governor Darmin Nasution is the “strongest” pick to fill the job permanently, a presidential aide said, an appointment that may bring an end to a one-year impasse over the central bank’s leadership, the Bloomberg News reported.

Economic Minister Hatta Rajasa, who has advised President Susilo Bambang Yudhoyono on cabinet selections, declined to say in an interview yesterday if and when Yudhoyono will name Nasution, 61, to the job. Nasution was head of the nation’s tax office before becoming senior deputy governor and acting chief last year.

The central bank governor post has been vacant since Vice President Boediono resigned in May 2009 to become Yudhoyono’s running mate in last year’s presidential election. An appointment would plug a vital gap in the country’s top economic leadership, after Yudhoyono named Agus Martowardojo as Indonesia’s finance minister this week.

“Indonesia today is different even from a year ago and Nasution would be a safe pair of hands to help steer the big tanker that the country has become,” said Wellian Wiranto, a Singapore-based economist at HSBC Holdings Plc. “He’s done a good job holding the fort and it will provide continuity and stability.”

Any nominee for Bank Indonesia’s top position needs to pass a parliamentary hearing before getting an approval from lawmakers. If confirmed, Nasution will be the 14th governor in the central bank’s 57-year history.

Yudhoyono inaugurated Martowardojo, a career banker, as finance minister on May 20. The president director of PT Bank Mandiri, the country’s largest lender, will replace Sri Mulyani Indrawati, who joins the World Bank as one of its three managing directors next month after a tenure marred by an opposition campaign accusing her and Boediono of abusing their authority.

“Nasution was floated as one of the names for the finance minister job and now that has been filled, it leaves him clear to assume the position” of central bank governor, Wiranto said. “If that turns out to be the case, the appointment will be another key support factor in Indonesia’s drive to push its economic growth to a structurally higher level.”

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