JAKARTA, June 5 - Bank Indonesia will draft the technical regulations needed to operationalize a broader mandate to support economic growth after parliament approved a sweeping new financial system law, the central bank's spokesperson said on Friday.
In a statement, spokesperson Ramdan Denny Prakoso said Bank Indonesia supported the legislation and had provided feedback during the law's deliberation. Parliament on Thursday adopted a law that explicitly adds "real sector growth" and "job creation" to the central bank's remit, alongside the institution's existing goals of maintaining price and exchange rate stability and pursuing sustainable economic growth.
Analysts and market observers have expressed caution about several provisions in the new law. Concern centers on parliament's expanded authority to evaluate and issue binding recommendations to Indonesia's financial institutions, including Bank Indonesia, and on a revised mechanism that could affect the process for removing members of BI's board of governors.
The law has also heightened investor unease about potential interference in central bank operations to ensure alignment with President Prabowo Subianto's aggressive growth agenda. The president's administration remains committed to an 8% GDP growth target by 2029, while managing multiple challenges across the economy, and some investors worry that the law could be used to prioritize that political goal.
Many specific provisions of the law remain unavailable to the public. Lawmakers and government officials have released only selected details, and the full text has not yet been made public, leaving unanswered questions about how the new powers and mandates will be applied in practice.
"BI will prepare the necessary implementing regulations in accordance with the regulatory mandate given to BI after (the new law) is officially enacted," Ramdan Denny said. The spokesperson added that the central bank will continue to set its policy mix with the aim of supporting national economic stability and contributing to sustainable economic growth, and that it would work with the government and parliament to meet those objectives.
Next steps will include the formal enactment of the law, publication of the full legal text, and the drafting and issuance of implementing regulations by Bank Indonesia to clarify how the expanded mandate will be translated into operational policy and practice.