'Challenging commencement': The newly appointed pro-growth finance minister in Indonesia starts his tenure amidst financial chaos within the market

In a surprising turn of events, Indonesia's previous Finance Minister, Sri Mulyani Indrawati, stepped down from her position on an unspecified date, stirring up fears of widening deficits and an economic slowdown. Her departure, which came just under a year since President Prabowo Subianto took power with promises to lift economic growth to 8%, has stunned markets and caused the main stock index to extend losses.

Sri Mulyani Indrawati, known for her cautious handling of the economy, was a safeguard of prudent fiscal policy according to Hasnain Malik, EM equity and geopolitics strategist at Tellimer. Her departure has left many investors fearing the hard-fought fiscal credibility could be eroded by populist spending plans under President Prabowo Subianto.

The abrupt removal of Sri Mulyani Indrawati has been replaced by economist Purbaya Yudhi Sadewa, who officially took office on Sept 9. Purbaya Yudhi Sadewa aims to accelerate economic growth and considers President Prabowo Subianto's target of 8% growth as "not impossible." He intends to rapidly boost the economy by involving both the private sector and the government more actively.

Purbaya Yudhi Sadewa mentioned global challenges in technology and geopolitics as difficulties in his job but remains optimistic about Indonesia's potential for growth. He also acknowledged the importance of maintaining the rupiah's stability, with the central bank intervening in the foreign exchange market to ensure the rupiah moves in line with its fundamentals.

The reshuffle has not only affected the stock market but also Indonesia's international bonds, which have weakened. The rupiah fell by more than 1% against the US dollar, adding to the concerns of an economic slowdown in Indonesia, Southeast Asia's largest economy.

At her farewell ceremony at the finance ministry, Sri Mulyani Indrawati apologized for any shortcomings during her tenure and expressed her hope for the success of her successor. Purbaya Yudhi Sadewa, in his inaugural speech, pledged to work tirelessly to achieve the President's vision for economic growth.

As Indonesia navigates these challenging times, the focus remains on the new Finance Minister's ability to balance growth with fiscal responsibility, a task that will be crucial in maintaining investor confidence and ensuring the continued growth of Southeast Asia's largest economy.

'Challenging commencement': The newly appointed pro-growth finance minister in Indonesia starts his tenure amidst financial chaos within the market