ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print
Politics

Indonesia central bank bond law raises independence concerns

Fears arise that government could arbitrarily declare crisis to monetize debt

Bank Indonesia Gov. Perry Warjiyo speaks to central bank stakeholders at an annual meeting in November.   © Reuters

JAKARTA -- Recent legislation allowing Indonesia's central bank to buy bonds directly from the government in a crisis is raising concerns about the damage it could deal to central bank independence and fiscal discipline.

The Development and Strengthening of Financial Sector bill passed last month permanently enshrines into law an emergency measure taken in 2020 as the country was grappling with the coronavirus pandemic.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more