JAKARTA – In a significant reshuffle that rattled investors, Indonesian President Prabowo Subianto on Monday removed Sri Mulyani Indrawati, the country’s long-serving and internationally respected finance minister, replacing her with economist Purbaya Yudhi Sadewa.
The announcement was made by state secretariat minister Prasetyo Hadi just hours before Purbaya, former head of the Indonesia Deposit Insurance Corporation (LPS), was sworn in.
Sri Mulyani, who served under three different presidents, had been widely credited with steering Southeast Asia’s largest economy through multiple crises — from the global financial meltdown of 2008 to the Covid-19 pandemic — while also pushing ahead with tax reforms and fiscal consolidation. Her abrupt exit underscores the political recalibration under Prabowo, who formally took office less than a year ago.
Markets reacted nervously. The Jakarta Composite Index (.JKSE) reversed earlier gains to close 1.3% lower, while the rupiah, which had been up 0.7% against the dollar intraday, pared back most of its advance.
Sri Mulyani’s removal comes against the backdrop of two weeks of nationwide protests, with demonstrators demanding a fairer taxation system. Some unrest turned violent, with rioters breaking into her residence in late August.
Purbaya, who holds a PhD in economics from Purdue University and previously served as deputy minister at the maritime and investment ministry, pledged an ambitious growth agenda on his first day in office. “Eight percent growth is not impossible,” he told reporters, vowing to accelerate both government and private sector participation in driving the economy.
He also brings capital markets experience, having served as chief executive of state-owned Danareksa Securities before joining LPS in 2020.
While investors have long viewed Sri Mulyani as a stabilising technocrat with credibility on the global stage — she was once a managing director at the World Bank — her departure raises questions about Prabowo’s economic direction and whether policy continuity can be maintained.
