Perry Warjiyo, governor of Indonesia’s central bank since 2018, resigned unexpectedly on Monday, marking a significant leadership change amid ongoing economic uncertainty in Southeast Asia’s largest economy. The announcement was made by State Secretary Minister Prasetyo Hadi at a press conference in Jakarta; Warjiyo did not attend the event. President Prabowo Subianto accepted the resignation, and Senior Deputy Governor Destry Damayanti has been named acting governor.

Warjiyo, who was serving a second term set to expire in 2028, stepped down reportedly for personal reasons, according to Damayanti. His departure comes against a backdrop of stress on Indonesia’s financial markets, driven by both domestic challenges and global pressures. The country has faced increased scrutiny regarding its economic policies and fiscal discipline, raising concerns among investors about market appeal and governance transparency.

International credit rating agencies Moody’s and Fitch have expressed reservations about Indonesia’s policy reliability and transparency, while index providers FTSE Russell and MSCI have noted issues affecting market accessibility. The Indonesian rupiah has been one of the weakest major Asian currencies this year, depreciating nearly 8% against the U.S. dollar. Additionally, the Jakarta Composite Index has declined over 28%, positioning it as the worst-performing stock market in the region.

Warjiyo’s resignation is the latest in a series of high-profile departures, following the removal of Finance Minister Sri Mulyani Indrawati in a cabinet reshuffle last September. Indrawati, who held the finance portfolio for nearly 14 years over two decades, was widely regarded as a key figure in maintaining Indonesia’s fiscal stability.

Central bank independence has come under question recently, particularly after President Prabowo appointed his nephew, Thomas Djiwandono, as a deputy governor earlier this year. Market watchers are closely monitoring the appointment of Damayanti as acting governor to assess implications for policy direction.

Indonesia’s central bank halted its series of interest rate hikes last week, maintaining current levels after raising rates by 100 basis points in both May and June. Some economists interpret Destry Damayanti’s temporary leadership as an indication of near-term monetary policy continuity, especially in efforts to stabilize the rupiah. However, analysts note uncertainty remains over whether Damayanti’s appointment will become permanent. They argue that a permanent appointment would reassure markets by signaling policy stability, while a temporary one could prolong uncertainty and increase pressure on her successor to maintain economic stability.