Indonesian President-elect Prabowo Subianto is considering offering a cabinet position to current Finance Minister Sri Mulyani Indrawati, Bloomberg reports, citing a report by Reuters.
While unnamed sources cited in the report suggest Indrawati could either remain as Finance Minister or take on the role of Coordinating Minister for Economic Affairs, neither Indrawati’s nor Prabowo’s representatives have responded to requests for comment. The Finance Ministry also declined to comment.
Following the news, the Indonesian rupiah strengthened against the US dollar, erasing earlier losses and outperforming other Asian currencies on Monday. The rupiah climbed as much as 0.1% to 15,558 per dollar. Meanwhile, yields on 5-year bonds fell by two basis points to 6.42%, while benchmark 10-year yields remained largely unchanged at 6.68%.
Last week, Prabowo stated he may retain “many” ministers from outgoing President Joko Widodo’s cabinet, without disclosing any names. The incoming president, set to be inaugurated on Sunday, is expected to unveil his ministerial lineup shortly after his swearing-in.
The potential reappointment of Indrawati has been met with optimism by investors, who view it as a crucial step towards ensuring Indonesia’s economic stability and policy continuity during the leadership transition. Indrawati, 62, has held the post of Finance Minister since 2016 under President Widodo, playing a significant role in securing Indonesia’s investment-grade credit ratings and solidifying its reputation for fiscal prudence. Prior to her current role, she served as Finance Minister from 2005-2010 during President Susilo Bambang Yudhoyono’s administration, before moving to the US to become the World Bank’s Managing Director for six years.
Investors have emphasized the importance of the finance minister’s role in maintaining confidence in Indonesia’s fiscal and debt outlook, especially in light of the incoming administration’s extensive spending plans. Among Prabowo’s key policy priorities is the distribution of free meals to school children, a program estimated to cost the government $29 billion, exceeding Indonesia’s fiscal deficit for 2023.
