Jakarta. The Indonesian rupiah strengthened sharply against the US dollar on Monday after President Prabowo Subianto formally nominated Destry Damayanti as the sole candidate to become Bank Indonesia's next governor, easing uncertainty over the central bank's leadership.

The rupiah closed at Rp17,755 per dollar, gaining 142 points, or 0.79%, from its previous close of Rp17,897.

Ibrahim Assuaibi, director of Traze Andalan Futures, said the currency's gains reflected a positive market response to Prabowo's decision to nominate Destry, a current BI deputy governor, to lead the central bank.

The nomination was submitted to the House of Representatives (DPR) through a presidential letter to fill the position currently held by BI Governor Perry Warjiyo.

Destry has served on BI's Board of Governors since 2019 and is widely viewed by economists and business groups as a continuity candidate who would be unlikely to disrupt the central bank's existing policy direction.

"With Destry, we already know her track record. She is continuing the policies that have been implemented so far, so there is no reason to worry," Shinta Widjaja Kamdani, chairwoman of the Indonesian Employers Association (Apindo), said previously.

"What businesses need now is certainty, and preferably as soon as possible," she added.

Before Destry's nomination, several names had been mentioned in market speculation, including fellow BI Deputy Governor Thomas A.M. Djiwandono, Finance Minister Purbaya Yudhi Sadewa, former BI Governor Burhanuddin Abdullah and former Finance Minister Chatib Basri.

None had been formally nominated at the time.

Destry's nomination now gives markets greater clarity over the succession process, although she must still undergo the parliamentary approval process before taking office.

Ibrahim said external developments also supported the rupiah, particularly growing hopes that Iran and Oman could reach an agreement that would eventually allow shipping through the Strait of Hormuz to resume.

The waterway is a crucial global energy corridor that has historically carried about one-fifth of the world's oil supply.

Iran said Sunday that talks with Oman were nearing an agreement. Still, it reiterated that the strait would only reopen after the United States met additional conditions, including compensation for extensive attacks on Iran.

The easing of concerns over energy-driven inflation has also prompted traders to reduce bets on further Federal Reserve interest-rate increases, Ibrahim said.

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