BRIDS: Appointment of Minister Purbaya Brings New Perspective on Indonesia Economy

Jakarta, September 10, 2025 – The Government officially inaugurated Purbaya Yudhi Sadewa as the Minister of Finance of the Republic of Indonesia on September 8, 2025, replacing Sri Mulyani Indrawati (SMI). This transition marks an important moment in the dynamics of the national economy, given the Ministry of Finance’s strategic role as the guardian of fiscal stability and the driver of economic policy.

Responding to the change, Helmy Kristanto, Chief Economist, Macro Strategist & Head of Fixed Income Research at BRI Danareksa Sekuritas (BRIDS), stated in his research report that this cabinet reshuffle represents a major shift with the replacement of SMI. The move has caused turbulence in financial markets, with the rupiah weakening, the Jakarta Composite Index (JCI) declining, and bond yields rising as investors reacted to the news.

For years, SMI was regarded as the key guardian of Indonesia’s fiscal credibility. She maintained the budget deficit below 3% of GDP in most years, except during the pandemic. Her discipline and reform agenda earned international recognition, including the Best Minister Award in 2018. She also led Indonesia through two major crises: the 2008 Global Financial Crisis and the COVID-19 shock, during which economic growth was preserved. Her departure therefore represents the loss of a figure highly trusted by both domestic and global investors.

In his report, Helmy highlighted three key points regarding the Ministry of Finance under Purbaya Yudhi Sadewa’s leadership:

1. Broad Experience – Purbaya brings extensive experience from financial markets, government positions, and his leadership at the Indonesia Deposit Insurance Corporation (LPS). This combination gives him a broader perspective, enabling him to address economic challenges from multiple angles.

2. Fiscal–Liquidity Insight – His background at LPS provides deep understanding of the interaction between fiscal spending and system liquidity. This could translate into potential reforms prioritizing smoother and more balanced spending patterns in the coming years. He is also recognized for his strong grasp of business and economic cycles gained through his career in financial markets.

3. Pro-Growth Orientation – Purbaya is known for his pro-growth stance, which is timely given the current slowdown in economic momentum. In a recent LPS forum, he emphasized that Indonesia’s 2026 GDP growth target of 5.4% remains achievable, as long as fiscal and monetary engines move in tandem. This signals the likelihood of counter-cyclical policy support to spur growth.

“We view Purbaya’s appointment as pointing toward potential policy continuity, but with a stronger pro-growth focus. His approach may balance fiscal discipline with growth support. However, his initial policies will be crucial in determining the pace of market acceptance,” explained Helmy.

On Tuesday’s (Sept 9) trading session, the rupiah opened weaker at IDR 16,475 per US dollar, signaling that pressures persist. According to BRIDS, any increase in bond yields could attract buyers, particularly banks and pension funds. Market volatility is expected to continue in the short term. However, with Bank Indonesia (BI) already in an easing cycle and the Fed expected to cut rates next week, the recent volatility could also present opportunities.

From the capital market perspective, the JCI closed significantly lower on Tuesday (Sept 9), dropping -1.78% to 7,628, with substantial net foreign selling recorded at IDR 4.32 trillion in the regular market.

According to Chory Agung, Customer Engagement & Market Analyst Department Head at BRIDS, technically the JCI remains in a bullish trend with the nearest resistance at 7,885–8,021. However, the index may continue its downward move toward the support area of 7,448–7,571. “The foreign sell-off indicates a negative market response to the appointment of the new Finance Minister, particularly in the banking sector. For example, BBCA has seen significant foreign selling, with net foreign outflows reaching IDR 4.9 trillion over the past week,” explained Chory.