Jakarta – President Prabowo Subianto abruptly removed Finance Minister Purbaya Yudhi Sadewa on Monday, naming his deputy Suahasil Nazara as the new head of the finance ministry. The change, announced during a brief handover ceremony, was intended to reassure investors and restore trust in Indonesia’s fiscal policies.

After learning of his termination via a phone call with the president’s spokesperson, Purbaya told reporters he was initially upset but had half expected the move. He said he felt “better” later and could now sleep soundly, adding that he had no policy disagreement with the president but cited differences with other officials.

Economic backdrop

Purbaya’s tenure, though marked by the fastest growth in three years, also saw the widest budget deficit in over two decades outside the pandemic period, along with credit‑rating outlook downgrades from Fitch and Moody’s. Capital outflows this year have pushed the rupiah to a historic low, driven by concerns over fiscal profligacy, central‑bank interference, and market‑transparency issues, compounded by global risk aversion from the Middle‑East conflict.

Despite these challenges, Purbaya described his time in office as “decent,” pointing to rising economic growth, and said he plans to spend his retirement fishing in a pond behind his house.

New finance chief’s agenda

At the handover, Suahasil Nazara urged all stakeholders to cooperate and pledged to safeguard Indonesia’s fiscal credibility while adhering to the legislated fiscal deficit limit of 3% of GDP. The 55‑year‑old technocrat is well known to investors, and many analysts expect his appointment to calm markets.

Shinta Kamdani, chair of Indonesia’s Employers Association, welcomed the transition, emphasizing the need for policy continuity and institutional understanding. She noted that a healthy budget and limited fiscal space are crucial, but continued government support remains important to sustain purchasing power, boost investment, and increase productivity.

The leadership change comes just days after the finance ministry marked one year under Purbaya, a period during which Southeast Asia’s largest economy has struggled with a crisis of confidence among investors and analysts.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.