ASIATODAY.ID, JAKARTA – A major political and economic shake-up has taken place in Indonesia.
President Prabowo Subianto has officially dismissed Sri Mulyani Indrawati from her role as Minister of Finance on Monday, September 8, 2025.
She has been replaced by Purbaya Yudhi Sadewa, former Chairman of the Indonesia Deposit Insurance Corporation (LPS).
The replacement was formalized through Presidential Decree No. 86/2025 and immediately drew attention from both the public and financial markets.
State Secretary Prasetyo Hadi announced that the reshuffle was based on the President’s in-depth evaluation. Apart from the Ministry of Finance, changes were also made in five other ministries, including the Coordinating Ministry for Political and Security Affairs, the Ministry of Migrant Workers, the Ministry of Cooperatives, and the Ministry of Youth and Sports.
“The President has decided to make changes to several cabinet positions within the Merah Putih Cabinet,” Prasetyo said at a press briefing.
Why Was Sri Mulyani Dismissed?
Although no official reason was given, Sri Mulyani’s position had come under intense scrutiny. Her fiscal and taxation policies were criticized for burdening citizens, sparking mass protests in late August. Her private residence in Bintaro, South Jakarta, was even looted by unidentified groups during the unrest.
The reshuffle also reflects the government’s intention to accelerate economic consolidation amid global challenges.
Market Impact: IHSG Plunges
Shortly after the announcement, the Jakarta Composite Index (IHSG) closed down 1.28% at 7,766. Investors reacted nervously to the replacement of Sri Mulyani, who had long been recognized internationally as a credible and prudent policymaker.
Senior economist at Indef, Mohamad Fadhil Hasan, highlighted her role in maintaining fiscal stability and investor trust.
“If her dismissal is perceived as politically motivated or due to public pressure, it could trigger negative reactions from businesses, markets, and the public,” he warned.
Purbaya Yudhi Sadewa Steps In
Purbaya Yudhi Sadewa, a seasoned economist and senior policymaker, is now officially Indonesia’s new Finance Minister. His term at LPS was originally set to end later this year, but he now faces the enormous challenge of managing state finances.
Key issues awaiting him include addressing the state budget deficit, financing infrastructure development, and maintaining investor confidence to ensure economic stability. (AT Network)
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