stocks are down more than 25% this year.
BI has raised interest rates by 100 basis points since May, including its first off-schedule hike in eight years in June, to slow capital outflows and support the currency. Reuters reported that markets briefly steadied after her nomination, and her early messaging has leaned toward continuity: at her first meeting as interim governor last week, BI held rates steady, put rupiah stability first, and said it would use other tools to support growth.
So Wednesday’s hearing is less about a new playbook and more about whether lawmakers endorse a steady hand. With parliament dominated by parties aligned with President Prabowo Subianto, she’s widely expected to pass, though the length of her mandate is still unclear.
Why should I care?
For markets: Bank Indonesia’s 100-basis-point hike cycle is also a trust signal for rupiah assets.
When investors worry that the rules could change, they demand extra return to hold local bonds and stocks. That “uncertainty premium” can push money out, weaken the rupiah, and force the central bank to lean harder on higher rates or other stability measures.
That helps explain why BI has tightened by 100 basis points since May and the currency is still lower: some hikes may be offsetting doubts, not just cooling demand. If Damayanti’s vetting and likely confirmation strengthens the sense of continuity, that premium can shrink. Markets typically feel that first in Indonesia’s government-bond yields and in rate-sensitive Indonesian equities.