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The House of Representatives has demanded the central bank,
Bank Indonesia (BI), get it involved in the formulation of BI policies
that are essential to improve the country's economy.
"The House considers that the central bank needs to discuss with it
prior to the formulation of the bank's regulations so that the bank can
develop accurate, reliable regulations and issue them at the right
time," the chairman of the House's commission XI overseeing financial
affairs, Awal Kusumah, told a hearing with BI officials Monday.
According to Law No. 3/2004 on BI, the central bank has the right to
formulate regulations and impose sanctions without prior permission
from the House.
Still, BI governor Burhanuddin Abdullah did not object to the House's
request, although it he suggested restricting its scope to regulations
that are "strategic" and have a deep impact on the economy.
"Principally, the central bank always communicates its regulation to
its stakeholders and the society through public forums before the bank
issues the regulation," Burhanuddin said.
"As a central bank whose job is related to capital markets, banking
industries and all economic actors, BI needs to respond quick to cope
with changes in the areas. And we think that BI has been effective in
formulating its regulations to stabilize the country's economy and
financial system," he said.
"However, we acknowledge that we need to communicate with the House
when we formulate BI regulations that are substantial and have wide
impacts to the society."
According to BI deputy governor Muliaman D. Hadad, the central bank
issued more than 30 regulations on average over the past few years. BI
issued 19 regulations last year, 30 in 2006, 52 in 2005 and 33 in 2004.
"Therefore, we think that we do not have to consult to the House on the
formulation of BI regulations that do not impact the society at large,"
Muliaman said.
Also at the hearing, the central bank requested the House's approval to
give a SDR (special drawing right) of 5.1 million (about US$3.22
million) to Liberia as part of the International Monetary Fund's (IMF)
plan to erase that country's debt in a bid to eradicate poverty there.
The money will be taken from Indonesia's debt refund to the IMF, which
amounted to SDR 25.5 million, Burhanuddin said.
BI said Indonesia would contribute only SDR 5.1 million, or 0.96
percent of Liberia's total debt of SDR 530 million, in accordance with
Indonesia's quota share of 0.96 percent in the IMF.
The House said they approved BI's decision because it would help
eradicate world poverty.
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