Indonesia’s finance minister has been forced to deny rumors of her imminent resignation, after the country’s stock exchange yesterday fell to its lowest point in years.
Speaking at what Reuters described as a “hurriedly called press conference” yesterday afternoon, Sri Mulyani Indrawati said that she remained in her post and in charge of Southeast Asia’s largest economy.
“We are here, we are responsible,” she said, according to Reuters’ report. “I will not step down.”
Also yesterday, Hariqo Wibawa Satria, a spokesperson for the Presidential Communications Office (PCO) said that the rumors of Sri Mulyani’s resignation were false. “We would like to emphasize that the information circulating on social media regarding Ms. Sri Mulyani’s resignation as minister of finance is untrue or a hoax,” Hariqo said in a video on the PCO’s official Instagram account.
The press conference came after the benchmark Jakarta Stock Exchange Composite Index yesterday plunged more than 7 percent from the previous day’s close, forcing the bourse to halt trading for the first time since 2020. The rupiah concurrently slid to a two-week low against the dollar.
According to market analysts, a range of factors accounted for the sudden drop in the index, including weak consumer sentiment and concerns over President Prabowo Subianto’s fiscal strategy in light of his ambitious spending plans and the country’s slumping tax revenues. These fell by 30 percent in the first two months of 2025, which the Finance Ministry put down to the shifting prices of key commodities such as coal, nickel, and crude oil, as well as “administrative changes to the way personal income tax and value-added tax were collected.”
There have also been a lack of investor confidence in Indonesia’s state-owned companies, which have been placed under the supervision of the country’s newly established sovereign wealth fund Danantara Indonesia.
The market panic was further compounded by rumors that Sri Mulyani had stepped down as finance minister, a position she also held under presidents Joko “Jokowi” Widodo and Susilo Bambang Yudhoyono.
“Rumors about the resignation of Finance Minister Sri Mulyani Indrawati became the concern of market players. Including one that is the focus of the market because so far her position as finance minister is seen as positive,” Valdy Kurniawan, an analyst for Phintraco Securities, told Nikkei Asia.
As this analyst suggested, during the course of her stints as finance minister under Jokowi and SBY, Sri Mulyani earned international respect as a reliable and conservative steward of the Indonesian economy. In particular, she has earned praise for her reforms of the country’s chaotic taxation system and her role in steering Indonesia through the global financial crisis and the COVID-19 pandemic.
In October, as he was finalizing his cabinet, President Prabowo Subianto decided to reappoint her as finance minister as a gesture of reassurance to international markets, which had become unsettled by the new leader’s ambitious spending ambitions. These included plans to increase the country’s debt-to-GDP ratio to 50 percent in pursuit of Prabowo’s goals of greater self-sufficiency and his target of 8 percent annual GDP growth.
During yesterday’s press conference, Sri Mulyani pledged to maintain fiscal discipline and that the state budget deficit would be maintained at 2.53 percent of GDP in 2025, below the 3 percent legal ceiling. She also said that that the government will ensure transparency in the management of state-owned firms now that they have been transferred to the Danantara investment fund.
Discussion about this post