By Gayatri Suroyo and Fransiska NangoyIndonesia’s central bank governor Perry Warjiyo stepped down on Monday, in a surprise move that weighed on Indonesian assets as analysts expressed renewed concerns about Bank Indonesia’s independence.The government called for calm from the markets. The rupiah IDR closed 0.36% weaker on Monday at 18,000 per dollar — its weakest in more than a week — while the main stock index dropped 0.17%.Bank Indonesia has been under pressure to support President Prabowo Subianto’s growth agenda, with the currency sliding to a historic low in June on concerns over both fiscal management and central bank independence.Parliament last month passed sweeping legislation that reinforces Bank Indonesia’s role in supporting growth while empowering legislators to make binding recommendations for independent financial regulators and the central bank.“What must now be anticipated after Perry’s resignation is the weakening of Bank Indonesia’s independence,” said Bhima Yudhistira Adhinegara, executive director of the Center of Economic and Law Studies.“Restoring investor confidence will certainly not be easy, especially since the direction of monetary policy is under executive control.”Destry Damayanti, a Bank Indonesia senior deputy governor, was named as interim governor before the markets opened, after Prabowo accepted Warjiyo’s resignation.Destry said Warjiyo had submitted his resignation on Saturday due to personal reasons, and she pledged to keep Bank Indonesia’s focus on maintaining rupiah stability.After her appointment, Destry went into a flurry of meetings, including with finance minister Purbaya Yudhi Sadewa and later with Prabowo. Asked ahead of meeting the president whether the Bank had intervened significantly to defend the rupiah on Monday, she said: “Basically we continue to do the same thing as we did before.”Bank Indonesia’s role and independenceState secretariat minister Prasetyo Hadi, who announced Destry’s appointment at a press conference, declined to elaborate on Warjiyo’s reasons for quitting.Warjiyo himself could not be reached for comment. His abrupt resignation has reignited investor anxiety over policy credibility and political influence over Bank Indonesia.Warjiyo began his career at the central bank in 1984. He was first appointed governor in 2018 and was reappointed for a second five-year term by Prabowo’s predecessor in 2023.“A lot will depend on who takes over, with Destry, a senior deputy governor, stepping in initially. If Prabowo’s nephew (Thomas Djiwandono) as a deputy governor steps in, the market will regard this with suspicion, given this is a crucial technocratic post and BI [Bank Indonesia] should remain independent,” said Angus Mackintosh, an Asean specialist at Aletheia Capital in Singapore.The president will submit a maximum of three candidates for the governor’s job to parliament for a “fit and proper test”, and parliament then picks one. Prasetyo said the president had not yet put forward candidates.Destry, a former commissioner at the Indonesia Deposit Insurance Corp and previously chief economist at Bank Mandiri before joining Bank Indonesia’s board, said the Bank “will always ensure the continuity of its duties” to maintain stability in the rupiah and the financial system.The big three ratings agencies all rate Indonesia’s debt at the second-to-lowest investment grade.But Moody’s and Fitch cut their Indonesia outlooks to “negative” earlier this year, citing concerns about changes in the central bank’s mandate, while S&P this month kept its outlook “stable”. S&P said the Bank has had a level of operational independence since 2005 that was roughly in line with regional peers, and it did not expect its changing mandate to drastically affect its independence.Bank Indonesia surprised markets last week by keeping its benchmark rates unchanged, instead offering new incentives to attract foreign capital inflows aimed at supporting the rupiah. It had raised rates by one percentage point since May to shore up the rupiah.Last year, the abrupt removal of Indonesia’s influential finance minister Sri Mulyani Indrawati rattled markets, with investors fearing the country’s fiscal credibility could be eroded by costly populist spending plans under Prabowo.