Perry Warjiyo, Governor of Indonesia’s central bank, Bank Indonesia (BI), received approval from a key parliamentary committee for his reappointment for a second term, after pledging to maintain a “pro-stability” monetary stance until 2024.

Warjiyo’s current five-year term as BI chief ends in May. While full parliamentary approval is still needed for his reappointment, lawmakers typically adhere to the financial committee’s recommendation following a “fit-and-proper test.”

On Monday, Warjiyo emphasized strengthening BI’s policy mix to achieve price stability and support sustainable economic growth, aligning with a recently passed law that expanded BI’s mandate to include promoting growth.

“This year and next year, we will direct our monetary policy to guard stability, while other policies … we will direct to support economic growth,” Warjiyo stated.

BI plans to lower its inflation target to a range of 1.5% to 3.5% in the medium term, compared to the current target of 2% to 4%.

Inflation in Indonesia, Southeast Asia’s largest economy, has remained above target since last year, driven by high global commodity prices.

Warjiyo reiterated that BI’s cumulative interest rate hikes of 225 basis points from August to January would be sufficient to bring inflation back within target later this year.

“We will focus a lot on the stability of the rupiah exchange rate,” Warjiyo said, noting global uncertainties, such as the war in Ukraine and U.S. rate hikes.

Warjiyo projected economic growth to accelerate to 4.9% to 5.7% in 2025 and further to 5.1% to 5.9% in 2028. BI’s growth outlook for 2023 stands at the upper end of a 4.5% to 5.3% range.

In his address, Warjiyo highlighted his achievements during his current term, including BI’s response to the U.S. Federal Reserve’s tightening cycle and the COVID-19 pandemic, particularly BI’s bond-buying operations.

Warjiyo asserted that BI’s direct purchase of government bonds should only occur during crises and be executed in a “targeted, transparent, and temporary” manner. BI bought 1,104.85 trillion rupiah ($71.86 billion) of government bonds between 2020 and 2022 to support Indonesia’s COVID-19 expenditure.

A career central banker at 64, Warjiyo has been praised for maintaining a strong Indonesian economy amid volatile markets, though some economists have criticized him for delaying BI’s rate hike cycle and ending it prematurely.

Eriko Sotarduga, a member of the Indonesian Democratic Party of Struggle, supported Warjiyo’s reappointment due to his experience handling crises, such as the U.S.-China trade war in 2018 and the pandemic.

Sotarduga highlighted the challenges ahead, citing recent U.S. banking issues and potential impacts on Indonesia’s economy and the rupiah.

Warjiyo’s approval for a second term reflects confidence in his leadership and ability to navigate economic uncertainties, while maintaining stability and supporting growth in Indonesia’s economy.