(Bloomberg) -- Bank Indonesia Governor Perry Warjiyo vowed to cooperate with a corruption probe of the central bank, which was raided earlier this week by the country’s anti-graft agency.
Warjiyo said the central bank’s respect for the legal process was shown by the central bank’s handing of documents to KPK, and the provision of of statements by central bank officials. Still, he acknowledged that market observers will track the developments.
“Any news will affect market conditions and exchange rates,” he said at a briefing in Jakarta after the central bank announced it would leave interest rates unchanged. “With various news affecting the market and exchange rate, BI remains committed to maintaining exchange rate stability through intervention” and other measures.
The central bank of Southeast Asia’s largest economy was raided on Monday evening by officials from the watchdog, known as KPK, as part of a probe into the monetary authority’s use of corporate social responsibility funds. KPK is running similar probes of the Financial Services Authority and other agencies, and has said it has identified two people suspected of wrongdoing. It has not identified them or their institution.
Warjiyo reiterated that the central bank’s CSR program is run based on principles of good governance, and that officials will cooperate.
With few details available so far, the potential impact of the probe on Warjiyo is unclear. In late November, Indonesian President Prabowo Subianto, a former general, praised him as vital to maintaining the country’s financial stability, and compared him and the finance minister to four-star military generals defending the nation’s sovereignty through prudent financial management.
“We have the responsibility to protect our people’s hard-earned money,” Prabowo said, addressing the financial regulators and bankers attending the event. “You are given the trust, credibility to do so.”
Last year Warjiyo was given a second five-year term as Indonesia’s top central banker, having helped the country maintain a relatively fast pace of growth despite the challenges of the pandemic.
Indonesia ranked 115 on Transparency International’s Corruption Perceptions Index for 2023. That indicated it has more of a corruption problem than Egypt and Sierra Leone, but less of an issue than Pakistan or Paraguay.
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