Overview
- President Prabowo replaced long-serving finance minister Sri Mulyani Indrawati with Purbaya Yudhi Sadewa and removed four other ministers, while creating a standalone Ministry of Hajj and Umrah by presidential decree.
- Stocks fell and the rupiah weakened by more than 1 percent as Bank Indonesia intervened in the foreign exchange market, and Indonesia’s international bonds also declined.
- Purbaya was sworn in and formally took office on Tuesday, saying the task "isn't easy," calling 8 percent growth "not impossible" and indicating a nearer-term 6 to 7 percent target with stronger public and private sector participation.
- Analysts warned that Sri Mulyani’s exit could undermine fiscal credibility and raise deficit risks, and they urged clear signals on budget rules and policy continuity to steady sentiment.
- The reshuffle followed two weeks of unrest over lawmakers’ perks and living costs; Sri Mulyani’s home was looted during the protests, and Reuters reported she was notified of her removal about an hour before her replacement was announced.