Resignation rumours of the long-serving minister have helped spur turmoil in the stock market on Tuesday (Mar 18), with the benchmark index slumping by the most since 2011
[JAKARTA] Indonesia denied that veteran Finance Minister Sri Mulyani Indrawati is resigning, moving to calm investors after the biggest slump in stocks in more than a decade.
“I assure you that Sri Mulyani is not stepping down and our fiscal position is strong,” Indonesia parliament deputy speaker Sufmi Dasco Ahmad said, as officials held a briefing at the stock exchange on Tuesday (Mar 18). Dasco, a senior politician in President Prabowo Subianto’s Gerindra party, was responding to questions on whether the stocks decline was due to rumors of Indrawati’s departure.
The benchmark index slumped by as much as 7.1 per cent, the most since 2011, before paring its losses to 3.8 per cent after the government’s denials. Indrawati continues her duties and responsibilities as finance minister, Presidential Communications Office spokesperson Hariqo Wibawa Satria said in a video address posted on Instagram late on Monday. “The information circulating about Sri Mulyani Indrawati’s resignation as Minister of Finance is a hoax.”
Stocks plunged today and Bank Indonesia intervened to support the rupiah amid rumors in local newspapers and social media that Prabowo plans a Cabinet shake-up that could include Indrawati, who has helmed Indonesia’s finance ministry for 14 of the last 20 years.
Indrawati has been credited with steering South-east Asia’s largest economy through the turmoil spurred by the Covid-19 pandemic, embarking on an unprecedented debt monetisation with the central bank to fund stimulus spending.
Her commitment to fiscal prudence was made evident when the government managed to return the budget deficit below the legal limit of 3 per cent of gross domestic product by end-2022, a year earlier than promised. She also pushed for tax and budget reforms that helped the country earn two upgrades to an investment-grade debt rating with S&P Global Ratings during her watch. BLOOMBERG
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