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April 11, 2008

Central bank chief arrested in graft case

Indonesia's anti-graft agency detained outgoing central bank governor Burhanuddin Abdullah over a graft case on Thursday, Reuters quoted the agency as saying.

Abdullah, whose five-year term ends on May 17, and two of his colleagues are suspects in a case where a foundation linked to Bank Indonesia had illegally paid members of parliament. Abdullah has denied any wrongdoing.

Scores of high ranking officials have been detained amid President Susilo Bambang Yudhoyono's fight against graft in a country consistently rated as one of the most corrupt in the world.

"It's true that we have detained the central bank governor at the police headquarters for 20 days since today," Johan Budi, a spokesman for the country's anti-graft agency, also known as the Corruption Eradication Commission (KPK).

Abdullah was detained after around 6 hours of questioning at the anti-graft office. He smiled to reporters but did not give any comments. A central bank spokesperson said senior central bank deputy governor Miranda Goeltom will be acting governor if Abdullah is unable to do his job.

"The board of governors of Bank Indonesia regret and is saddened by the detainment of our leader, governor Burhanuddin Abdullah, as well as two other senior officials Rusli Simanjuntak and Oey Hoey Tiong who have already been detained by the KPK," the central bank said in a statement.

The statement said the bank has procedures and systems in place to maintain macroeconomic stability. Analysts said the news was unlikely to have any major market impact. The bank has undergone a series of reforms following various probes in the past decade, particularly over its controversial role in lending billions of dollars in emergency funds to banks at the height of the 1997-98 financial crisis.

Indonesia's parliament on Monday appointed chief economics minister Boediono as the next central bank, ending weeks of uncertainty over who would head the central bank at a time when Indonesia faces an increasingly difficult economic environment due to soaring prices.

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