J. Soedradjad Djiwandono

Who is J. Soedradjad Djiwandono?

Joseph Soedradjad Djiwandono was the Governor of Bank Indonesia, the nation's central bank, from 1993 until his sudden dismissal in 1998.

Djiwandono received his bachelor's degree in economics from the Gadjah Mada University in 1963 and went on to receive a Ph.D. from Boston University in 1980. Prior to accepting the position as Governor of Bank Indonesia in 1993, Djiwandono had expressed his concerns on the high number of bad debts in the banking sector to President Suharto.

The Asian Financial Crisis began to affect Indonesia by mid-1997. On 14 August, Bank Indonesia followed Thailand and Malaysia and moved to float the Indonesian rupiah. Under Djiwandono, the bank's "market-oriented response" to the crisis was praised by investors. However, it was also criticized for allowing Indonesia's banking system to grow too fast with 239 banks in establishment by September 1997. Of these banks, 16 were liquidated in November. Djiwandono later defended the decision not to close more banks citing concerns that "had more banks been liquidated, a total collapse [of the banking sector] may have resulted".

He was dismissed from office by Suharto's 11 February 1998 presidential decree but was not officially informed of the decision until six days later. Although no reason was given, economists believed Djiwandono's opposition to a new fixed exchange rate system for the rupiah contributed to the decision for his dismissal. The decision drew criticism from the International Monetary Fund and United States President Bill Clinton and placed a US$43 billion aid package at risk of being reversed. He was succeeded by Syahril Sabirin in a transfer ceremony on 19 February.