In Indonesia's history, the change of finance minister has been responded to variously by financial market participants. There are times when the market responds positively to the change of the country's fiscal general. However, there are times when the market responds otherwise.
Flashback to 11 years ago, precisely on September 27, 2014, the Composite Stock Price Index (JCI) closed down 32.95 points or 0.65% at 5,040.11. This weakening coincided with the inauguration of the Working Cabinet of President Joko Widodo (Jokowi).
At that time the position of Minister of Finance was entrusted to Bambang P.S Brodjonegoro, as well as a number of names filling the economic formation of President Jokowi's cabinet. The decline in the JCI, according to a number of analysts at the time, was due to a number of ministers in Jokowi's cabinet who were considered disappointing.
Almost two years later, on July 27, 2016, the JCI strengthened 0.96% to 5,274. At that time Jokowi overhauled the formation of his economic ministers and included the name Sri Mulyani as the country's fiscal general. Observers and analysts think Mulyani can improve the Indonesian economy.
Mulyani's welcome arrival has now come to a sad end. About nine years later, Mulyani was replaced by Purbaya Yudhi Sadewa on Monday (8/9/2025) by President Prabowo Subianto. The market immediately responded coldly as the JCI fell 1.28% or 100.49 points to 7,766.84 due to the sale of a number of stocks on Monday (8/9/2025).
The JCI started slumping around 3.40pm, when the index value of 7,870.35 dropped 73 points at the close of trading. That was minutes after the Palace's official announcement that one of the ministers being replaced was Sri Mulyani from the position of Finance Minister.
The weakening of JCI continued on Tuesday trade (9/9/2025). Having moved at the level of 7,780-7,790 during the first hour, a gradual decline in trading session I began around 10:00 to the level of 7,687.23, until it reached the point of 7,638.26 at 12:00. When trading session II opened at 13:35, the JCI strengthened slightly to 7,644.28, but did not manage to show significant movement beyond 7,650.
JCI trading on Tuesday closed down 138.24 points or 1.78% at 7,628.60. Stocks that experienced weakness included the energy, finance, infrastructure, property, technology, raw materials, and cyclical and non-cyclical consumer sectors, in the range of 0.24 to 1.73 percent.
Handover of office
The leadership relay of the number one person in the Ministry of Finance officially took place at the Mezzanine Hall, Ministry of Finance, Jakarta, Tuesday (9/9/2025).
Also attending the event were Coordinating Minister for Economic Affairs Airlangga Hartarto, Senior Deputy Governor of Bank Indonesia Destry Damayanti, Chairperson of the Indonesian Employers Association (Apindo) Shinta Kamdani, as well as officials from the Ministry of Finance, Bank Indonesia, Deposit Insurance Corporation (LPS), and Financial Services Authority (OJK).
In her farewell speech, Mulyani expressed her gratitude to all stakeholders and staff of the Ministry of Finance who have supported her during her tenure. She also apologized for any mistakes during her tenure in managing the country's finances.
For a total of almost 14 years in office, Sri Mulyani is a person with good credentials in the eyes of the international community. This is also what made hundreds of Ministry of Finance employees escort her out of the building where she has been guarding government spending.
The strains of a song called "Kalbu Language" echoed in the Mezanine hall of the Ministry of Finance. With occasionally wiping her tears, Sri Mulyani descended the stairs in her office, escorted by hundreds of Ministry of Finance employees.
Some of them even gave white roses to the Minister who served in three presidential eras as a sign of gratitude.
"I humbly apologize. To Mr. Pur, congratulations on carrying out the responsibility of managing state finances. I said goodbye this morning, and please from now on we will respect our privacy space or my personal space as an ordinary citizen," Sri Mulyani said during her farewell speech as Minister of Finance in Jakarta, Tuesday (9/9/2025).
Rumors of Mulyani's resignation have been heard several times but not proven. Negative market sentiment worsened following demonstrations in various regions, resulting in looting at various houses of members of the House of Representatives (DPR), including Sri Mulyani's house.
Various parties deplored the looting, saying that the President was unable to protect his minister who was instrumental in maintaining the nation's financial stability. The day after, Mulyani even appeared in a cabinet meeting and announced a number of policies that calmed the market.
Meanwhile, his successor Purbaya Yudhi Sadewa, the new Minister of Finance, promised to bring Indonesia's economy to 6 percent growth. But not yet a day in office, he made a number of controversial responses. One of them is related to the 17+8 demands echoed by students.
One of the demands of the people is to create an equitable tax situation.
"I haven't studied it, but basically this, that is the voice of a small part of our people. Why, maybe some of them feel disturbed, their lives are still lacking, yes. Once, I create economic growth of 6 percent, 7 percent, it will disappear automatically. They will be busy looking for work and eating well instead of protesting," said Purbaya Yudhi Sadewa.
In his speech during the handover, Purbaya asked for support from all levels of the finance ministry to work with him to ensure that fiscal policy continues to act as a strong instrument in maintaining stability, promoting economic growth, and realizing prosperity for all Indonesians.
"Let me express my highest respect and appreciation to Mrs. Sri Mulyani. Under her leadership, the Ministry of Finance has managed to maintain Indonesia's fiscal stability amid global dynamics, carry out budget efficiency, and oversee the government's priority programs until the 2026 Draft State Budget," he said.
He said, under Sri Mulyani's leadership, many dreams have been realized, but there is still homework to be done.
Purbaya said, under Sri Mulyani's leadership, many dreams have been realized, but there is still homework to be done.
"We all realize that the global economy is facing challenges, economic slowdown in various countries, geopolitical tensions, technological changes pose both risks and opportunities for Indonesia," he said.
Waiting for performance
Indonesian Capital Connection analyst Alfred Nainggolan noted that the JCI correction was influenced by the market's response to the replacement of Sri Mulyani as Finance Minister, who has been a credible figure and has gained market trust. Alfred had thought that the JCI received energy from the strengthening of global markets which strengthened today. But the correction turned out to be still ongoing due to internal sentiment.
"We see the accumulation of JCI corrections in the past 2 days. If it reaches -3% in the midst of a stronger global market, it means that market sentiment towards the change of minister is significant," said Alfred when contacted by SUAR, Tuesday (9/9/2025).
The potential for continued weakness and turmoil still exists, but will not be too great. The key is that there must be firm information or statements that can suppress investor action to sell shares on the stock exchange.
Furthermore, Alfred assessed that the current market behavior remains on wait and see and is eagerly awaiting the work plan of the new Finance Minister. Especially, breakthroughs that can be seen by the market as a clear difference between Purbaya Yudhi Sadewa's leadership and Sri Mulyani's leadership as state treasurer for the past 9 years.
"The Minister's statement about the target of increasing the economic growth rate to 6 percent will not be ignored by the market. Instead, rationalization through the release of work programs that answer and are able to resolve current issues through policies that will be carried out is much more awaited," he explained.
Read also:
Benedictus Krisna Yogatama
A number of issues that Alfred highlighted included unemployment and widespread layoffs, an increase in value-added tax (VAT) that caused household consumption to slow down, a decline in industrial demand that resulted in a slowdown in bank lending, a widening fiscal deficit, Bank Indonesia's decision to carry out burden-sharing, and stability that was disrupted due to the socio-political situation during the week.
The sudden reshuffle is also an indication that there are significant problems in addressing stability, marked by the dismissal of Coordinating Minister for Political and Security Affairs Budi Gunawan, who is currently vacant and ad-interim Defense Minister Sjafrie Sjamsoeddin.
"This worsens market perception, as the reshuffle signals increased security risks. The new Finance Minister must immediately announce his work plan and breakthroughs to give confidence to the market," Alfred concluded.
Lucky
Not only Indonesian financial markets, a number of analysts from foreign capital markets are paying attention to the appointment of a new finance minister to replace Sri Mulyani Indrawati.
As quoted from Reuters, Deputy Chief Emerging Markets Economist Jason Tuvey from Capital Economics, London, believes that Sri Mulyani's replacement triggers concerns regarding the pressure the President will exert to ease fiscal and encourage BI to finance government programs.
"The new Finance Minister's policy is not yet clear, but the key thing that can be seen is his position that is more lenient to the President's wishes. This attitude could lead to attempts to change the existing fiscal rules, or force the central bank to loosen monetary regulations aggressively," Tuvey said.
In line with Tuvey, Maybank Singapore Global Markets Economist Saktianti Supaat believes that the post-announcement volatility in the rupiah shows that the market is waiting for the Ministry of Finance's statement and comments on the change. Bank Indonesia will work hard to maintain rupiah stability, especially to prevent volatility that affects the business world.
"Sri Mulyani has been quite a strong anchor, with her international reputation and profile. Whoever replaces her must fill the huge void she leaves behind. Foreign investors are also eagerly awaiting a statement from the Ministry of Finance to get a stronger grip," said Supaat.
