As the rupiah plummeted to a historic low against the dollar, the House gave the green light for a legislative amendment that has raised alarm bells over central bank independence.

On Wednesday, Finance Minister Purbaya Yudhi Sadewa told lawmakers the amendment was aimed at boosting economic growth and enhancing global competitiveness at a time the country is facing multiple pressures from high global oil prices.

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"It’s not just about exchange rate stability, or just about inflation. It’s also about paying attention to economic growth and creating jobs," he said.

Lawmakers will now be tasked with evaluating the performance of the central bank with its new, expanded mandate as well as the Indonesia Deposit Insurance Corporation (LPS) and Financial Services Authority (OJK).

The LPS is an agency tasked with guaranteeing bank deposits and maintaining banking system stability, while the OJK is the country’s financial regulator.

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Under the amendment, the institutions will be obligated to follow House's recommendations.

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