Markets Remain Calm After BI Governor’s Resignation as Investors Await Policy Clarity, Mirae Asset Says

PT Mirae Asset Sekuritas Indonesia believes Indonesia’s domestic financial markets have demonstrated greater-than-expected resilience following the resignation of Bank Indonesia (BI) Governor Perry Warjiyo. Although the announcement initially raised concerns over significant market pressure, the investor response on the first day remained relatively contained. Market attention is now expected to shift toward BI’s leadership transition and the direction of its future policies.

Rully Arya Wisnubroto, Head of Research and Chief Economist at PT Mirae Asset Sekuritas Indonesia, said Mirae Asset had initially expected the central bank governor’s resignation to trigger a larger sell-off, particularly in banking stocks. However, this has yet to materialize, as investors have maintained a relatively constructive stance.

“The Jakarta Composite Index began the week with greater resilience than we had expected. We had anticipated a significant sell-off, particularly in banking stocks, but BMRI and BBCA instead gained ground, reflecting investor positioning that remains constructive in the short term,” Rully said.

According to Rully, this response indicates that market participants have not overreacted to the change in the central bank’s leadership. However, it does not mean that the risks have fully subsided. Following the relatively calm initial reaction, investors are expected to turn their attention to BI’s leadership transition and the consistency of monetary policy in maintaining economic and financial-market stability.

“Nevertheless, we see heightened risks ahead, particularly regarding perceptions of BI’s independence and a potential shift toward a more pro-growth stance. This could trigger volatility in domestic assets,” Rully said.

According to Rully, growing investor caution was reflected in the rupiah’s depreciation, with the currency briefly weakening beyond Rp18,000 per US dollar before returning to approximately Rp17,900 per US dollar. At the same time, the yield on 10-year Indonesian government securities (SBN) rose to around 7.35%, reflecting a higher market risk premium.

Meanwhile, Jessica Tasijawa, Fixed Income Analyst at PT Mirae Asset Sekuritas Indonesia, said the domestic bond market continues to experience considerable volatility following the announcement of the BI governor’s resignation. Prior to the announcement, the bond market had shown signs of improvement, supported by foreign investor inflows of approximately Rp16 trillion year to date (YTD), stronger demand from the banking sector, and the role of insurance companies and pension funds in supporting domestic demand.

However, according to Jessica, investor sentiment shifted following the announcement amid concerns over transparency, credibility, and governance in BI’s leadership transition. This drove SBN yields approximately 9 basis points higher, while the rupiah returned to around Rp18,000 per US dollar.

“We believe that clarity and decisive action from the government throughout the decision-making process—particularly regarding the appointment of the new BI governor—will be crucial in determining the direction of future policy and providing greater certainty for the Indonesian market,” Jessica said.

Nevertheless, Jessica believes the fundamentals of Indonesia’s bond market remain supported by several positive factors. These include S&P Global Ratings’ decision to maintain Indonesia’s sovereign credit rating and outlook, the redeployment of Rp200 trillion in surplus budget balance funds (SAL) to state-owned banks, better-than-expected fiscal performance in the first half of 2026, and continued foreign investor inflows into the SBN and Bank Indonesia Rupiah Securities (SRBI) markets, supported by Indonesia’s still-attractive yield spread.