(March 18): Indonesia’s veteran Finance Minister Sri Mulyani Indrawati said she will stay in her post, dispelling resignation rumours that helped drive the stock market to its biggest slump in three years.

“I reiterate that I am here, I am standing here, and I am not stepping down,” Indrawati said in a briefing on Tuesday. “I remain focused on carrying out the president’s duties and trust to manage state finances professionally.”

The categorical statement from the long-serving minister will be a crucial assurance to investors who had fretted that she would be leaving President Prabowo Subianto’s cabinet, based on local newspaper and social media reports.

It also follows similar denials from government officials as the benchmark Jakarta Composite Index fell 3.8% on Tuesday, the most since May 2022. Earlier in the day, it plummeted as much as 7.1%, bucking the rest of the region, as investors also worried about the growth prospects of Southeast Asia’s largest economy and the health of government finances.

The selloff dragged down the rupiah, which weakened 0.5% before paring losses as Bank Indonesia intervened “boldly” in the markets.

Coordinating Minister for Economic Affairs Airlangga Hartarto, who was also included in the speculation around a Prabowo cabinet shakeup, also affirmed on Tuesday that he was staying in his post.

“There are no plans to step down,” he told reporters. He added that he wasn’t worried about the stock market rout, saying the economy’s fundamentals remain strong.

Indrawati used the closely-watched briefing on Tuesday to emphasise that Indonesia’s fiscal health remains sound despite a rare budget deficit posted just two months into the year.

State revenues are poised to see a turnaround in March and post positive growth after the annual 21% decline posted in the January-February period, she said. Indonesia will also maintain its budget deficit target of 2.5% of gross domestic product this year, well within the legal limit of 3%.

Indrawati also bannered the “very good results” in the government bond auction on Tuesday, saying it was a sign that “investors are comfortable and confident with the management of the state budget.”

The government awarded an above-target 28 trillion rupiah (US$1.7 billion or RM7.6 billion) in bonds, with yields in line with those in the secondary market. Incoming bids were 61.8 trillion rupiah, of which foreign incoming bids were about 14 trillion rupiah.

“The government does not need to give high premiums to investors and shows that investors are comfortable and confident with our financing,” Indrawati said.

As for the stock market rout, the finance chief said they were monitoring global and domestic developments closely. She also addressed investor concerns about the sovereign wealth fund Danantara and how it would affect Indonesia’s state-owned enterprises.

“We will ensure that it is managed transparently and professionally,” Indrawati said.

Read also:
Indonesian stocks plunge 7% as growth, fiscal worries weigh

Uploaded by Magessan Varatharaja