Perry Warjiyo resigned Monday. Indonesia's central bank governor. Just stepped down. Surprise move, they're calling it.
Investors immediately panicked about central bank independence and fiscal policy. Because that's what investors do when they don't understand something. They panic first, Google "what does a central bank governor do" second, panic harder third.
The rupiah exists. Most people trading it couldn't find Indonesia on a map if you spotted them the ocean. But they've got strong opinions about monetary policy independence now. Very strong. They learned the word "hawkish" six months ago and they're not afraid to use it.
Warjiyo's resignation raises questions about the institution's autonomy. That's the polite way of saying nobody knows if someone got fired or quit or was asked to leave or was literally carried out by security. The statement said he stepped down. That's what every statement says. Nobody ever gets shitcanned in official press releases. They always step down to spend more time with family or pursue other opportunities or help their kid with a science project.
Here's what matters for your trading account: absolutely nothing. The rupiah will move. It always moves. Sometimes up, sometimes down, always for reasons that have nothing to do with whatever story Bloomberg writes. Your stop loss doesn't care why a central banker quit. Your stop loss doesn't read the news. Your stop loss just knows you put it in the wrong place again.
Technical levels remain unchanged. Support is still support. Resistance is still resistance. The 50-day moving average didn't resign. It's still there. Doing exactly what it did yesterday. Which is also nothing, because moving averages are lagging indicators that tell you what already happened.
But sure, liquidate your entire portfolio because a guy in Jakarta changed jobs.
Photo by Mufid Majnun on Unsplash
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