Indonesia sacks Finance Minister Purbaya, replaces him with deputy Suahasil

[JAKARTA] Indonesia on Monday (Sep 14) replaced Finance Minister Purbaya Yudhi Sadewa with Deputy Finance Minister Suahasil Nazara, marking another major reshuffle at the country’s powerful finance ministry.

This comes less than a year after Purbaya took over from long-serving minister Sri Mulyani Indrawati.

Suahasil, a seasoned technocrat who has served as deputy finance minister since 2019, will assume the top fiscal post with immediate effect.

The 55-year-old technocrat was sworn in by President Prabowo Subianto, according to footage broadcast on national television.

Purbaya, formerly chairman of the Board of Commissioners of the Indonesia Deposit Insurance Corporation, was appointed finance minister in September 2025, after Sri Mulyani stepped down after nearly a decade in the role.

His appointment had initially raised questions among investors over the future direction of Indonesia’s fiscal policy and the ministry’s long-standing reputation for prudent budget management.

The move comes amid heightened investor scrutiny over Indonesia’s fiscal outlook following a series of ambitious government spending programmes, including Prabowo’s flagship free-meals initiative and increased social-spending commitments. A source told The Business Times that the change came amid tensions within the administration over fiscal policy, including discussions over the transfer and placement of state funds between sovereign wealth fund Danantara and the finance ministry.

Purbaya’s tenure was marked by several significant policy moves, including his decision to transfer 200 trillion rupiah (US$12 billion) of the government’s cash reserves held at Bank Indonesia to five state-owned banks.

He described the measure as a signature policy that aimed to boost liquidity, encourage lending and support economic growth.

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“Positive move”

Analysts said Suahasil’s elevation is likely to reassure markets, given his extensive experience within the ministry and involvement in crafting Indonesia’s fiscal strategy over the past several years.

“We believe the appointment of Suahasil as the new minister of finance will be viewed positively by the market. His extensive experience in fiscal policy and economic management should provide greater confidence in the continuity of prudent fiscal management,” Henry Wibowo, co-founder of Alphagate Capital told BT.

Lavanya Venkateswaran, senior Asean economist at OCBC, also viewed the appointment favourably, noting that Suahasil’s technocratic background could support policy continuity.

“I see it as a positive move considering Suahasil is a technocrat and is well versed with the challenges that the fiscal situation and broader economy face,” she said.

The Jakarta Composite Index closed 0.1 per cent lower on Monday, after coming under pressure throughout the session and falling as much as 2 per cent, as investors weighed the potential impact of higher global crude oil prices on Indonesia’s fiscal position.

Speaking to reporters after his inauguration, Suahasil pledged to safeguard the health and credibility of the country’s public finances while ensuring the state Budget can continue to fund the government’s priority programmes.

“Keeping the budget deficit below 3 per cent of GDP (gross domestic product) will remain a key priority,” he said.

Suahasil, who previously served as head of the Fiscal Policy Agency and held senior roles at the National Development Planning Agency, is widely regarded as one of the key architects of Indonesia’s fiscal framework.

The appointment comes at a time when investors are closely watching Indonesia’s ability to balance higher spending needs with fiscal prudence.

The government has repeatedly pledged to maintain the budget deficit below the legal ceiling of 3 per cent of GDP, a key anchor for investor confidence and the country’s investment-grade credit ratings. Wibowo from Alphagate said the commitment should reassure investors about Indonesia’s fiscal credibility and provide greater policy certainty at a time when markets remain particularly sensitive to fiscal risks.