September 9, 2025
JAKARTA – Finance Minister Sri Mulyani Indrawati bowed out on Monday in the first major cabinet reshuffle under President Prabowo Subianto, shocking markets as she ended her run as the nation’s longest serving finance chief and leaving the government to find a way to restore calm.
Her departure is by and large the biggest blow to the ambitions of the current administration, which had relied on her global reputation and sound fiscal management to ease the transition from a government that consistently kept economic growth at around 5 percent.
After serving as finance chief under three different presidents over 14 years with a stint at the World Bank in between, rumors of her impending resignation had emerged multiple times in the past year, growing stronger after her house was ransacked on Aug. 31 during the recent riots.
The cabinet shake-up, which also saw the chief security minister removed and a new ministry established, follows more than a week of widespread protests fueled by economic grievances that escalated into rioting and looting after the police killed an innocent bystander.
The Prabowo administration replaced her with seasoned economist Purbaya Yudhi Sadewa, who has headed the Indonesia Deposit Insurance Corporation (LPS) since 2020 and has maintained close ties to senior officials across different administrations.
State Secretary Prasetyo Hadi declined to give a definitive answer when asked whether Sri Mulyani had tendered her resignation or if she was removed from her post. But one source close to Sri Mulyani told The Jakarta Post on Monday that the finance minister “did not resign”.
Sri Mulyani has yet to comment publicly on her departure.
Purbaya told reporters at his new office later that day that he had only found out about his new role hours before his inauguration and that as the new finance minister, his main objective was to spur economic growth “as fast as possible” and “as optimal as possible” in line with the administration’s 8 percent economic growth target.
“It is the direction we are heading toward,” Purbaya said.
Read also: President reshuffles cabinet after weeklong protest, replacing Sri mulyani
In response to Sri Mulyani’s departure, the Indonesia Stock Exchange (IDX) composite fell 1.28 percent at Monday’s close, with the sharpest drop occurring during the reshuffled line-up at around 4 p.m. The rupiah also weakened, slipping from around Rp 16,300 per US dollar before the ceremony to as low as Rp 16,572 a few hours later.
Institute for Development of Economics and Finance (Indef) economist Fadhil Hasan said Purbaya was a “decent economist” but lacked direct experience in fiscal management.
“He’s not the best option. [Deputy finance minister] Suahasil Nazara would have been a better option,” Fadhil said in a statement on Monday.
Separately, Andalas University economist Syafruddin Karimi said that Purbaya needed to balance his optimism with the fiscal discipline established by Sri Mulyani, noting that failure to follow through could trigger further economic instability.
Leadership changes
Also in Monday’s reshuffle, Prabowo removed Budi Gunawan and Dito Ariotedjo from their posts as coordinating politics and security minister and youth and sports minister, respectively, although their successors have yet to be appointed.
Speculation is swirling that Budi would be replaced by Defense Minister Sjafrie Samsoeddin after Sjafrie fronted a press conference on Aug. 31 outlining the government’s security response to the protests and rioting. Sjafrie was at the time flanked by leaders of the police and military while Budi, who was the most senior minister in security affairs, was conspicuously absent.
Read also: Prabowo calls for severe response to protests
Prasetyo said the President had removed Budi after evaluating his performance “comprehensively” rather than on “something specific”, and that an interim coordinating minister would be appointed until a permanent replacement is decided.
As for Dito, Prasetyo said Prabowo already has a replacement in mind, but the person was unable to attend Monday’s inauguration and will instead be sworn in at a later ceremony. Dito is a politician of Golkar Party, the largest party in the ruling coalition, even bigger than Prabowo’s own Gerindra Party, the de facto leader of the coalition.
The President also replaced on Monday cooperatives minister Budi Arie Setiadi with his deputy at the ministry, Ferry Juliantono from Gerindra.
Budi, a loyalist of former president Joko “Jokowi” Widodo, had for months faced public calls for his removal after being implicated in a trial in May over an online gambling scandal at the Communications Ministry, which he briefly led at the end of Jokowi’s term. Budi remains neither a suspect nor a defendant in the case.
Read also: Prabowo vows to clean house amid calls for reshuffle
On Monday, Abdul Kadir Karding of the National Awakening Party (PKB) was replaced by former Golkar lawmaker Mukhtarudin as the new migrant workers protection minister. Karding’s dismissal followed public outrage after he was photographed playing dominoes with Forestry Minister Raja Juli Antoni and a former illegal logging suspect, whose investigation was dropped after a court declared it void.
Aside from the leadership change, Prabowo also appointed Haj Organizing Agency (BP Haji) chair Mochamad Irfan Yusuf and deputy chair Dahnil Anzar Simanjuntak as minister and deputy minister of the newly created Haj and Umrah Ministry.
The new ministry was established following the enactment of a revision to the 2019 Haj Law last month, which elevated the BP Haji into a full ministry tasked with taking over haj management from the Religious Affairs Ministry starting next year.
Monday’s reshuffle is the biggest so far in Prabowo’s 11-month presidency since he appointed a new science minister in February. The President had since hinted at another reshuffle when he issued repeated warnings that underperforming ministers or those implicated in corruption would be removed.
Yet Prabowo on Monday did not appoint a new deputy manpower minister to replace Immanuel Ebenezer, who was dismissed after being named a suspect by the Corruption Eradication Commission (KPK) last month.