JCI Declines Over Uncertainty of Finance Minister Dismissal

• JCI falls up to 1.6% as markets react to the finance minister reshuffle.

• Fiscal concerns rise after Sri Mulyani’s exit, triggering rupiah drop and foreign outflows.

  
  

By Kenzie Aryasatya, Fayza Nawra Avanitanya, Muthia Noor Safitri, Imam Fakhri Prayogo Harianto 

September 12, 2025 at 16:30 GMT+7

The Jakarta Composite Index (JCI) fell sharply following the cabinet reshuffle, dropping between 1.2% and 1.6% despite opening higher earlier in the day. The market decline was concentrated in banking and other blue-chip counters, reflecting investor unease over policy stability at a time of shifting fiscal leadership. 

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The rupiah also weakened nearly 1% against the US dollar, signaling that currency markets shared concerns over Indonesia’s credibility on budget discipline. For traders, the moves suggested a rapid repricing of risk as investors weighed the implications of the leadership change in the finance ministry, given its central role in managing debt, spending, and revenue collection. 

"Rupiah may have to bear the brunt, until greater confidence about what the cabinet reshuffle entails for any prospective shifts in budgetary outlays and funding sources," said Aninda Mitra, head of Asia Macro Strategy at BNY Investment Institute.

Menkeu Purbaya Yudhi Sadewa (left) with Sri Mulyani, Tuesday (9/9), Jakarta, Indonesia | Source: Ministry of Finance Documentation

Sri Mulyani Indrawati’s departure closed a tenure widely associated with fiscal prudence and credibility. Her 2026 budget proposal had targeted a deficit of about 2.5% of gross domestic product, reinforcing Indonesia’s post-pandemic consolidation path and reassuring investors about debt sustainability. 

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Her successor, Purbaya Yudhi Sadewa, has struck a more growth-oriented tone, pledging faster expansion while supporting social and development programs. While these priorities appeal to domestic audiences, they leave investors questioning whether spending could rise at the expense of fiscal discipline. 

Concerns are centered on whether deficit ceilings or revenue assumptions will shift, potentially signaling a looser budget framework. Market confidence will depend on how growth ambitions are financed and whether discipline in public finances can be preserved alongside broader economic goals.

The benchmark Jakarta Composite Index (JCI) recorded a 9.1% gain over the same period | Source: AFP

Foreign outflows were reported as global investors reassessed Indonesia's risk profile following the cabinet reshuffle, which included a new finance minister. This outflow reflects uncertainty about how future fiscal policy, government spending, and debt management might change under the new leadership. 

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The resulting volatility in stock and bond markets could pose challenges for Bank Indonesia, which must maintain stability in rupiah while supporting economic growth. Providing clear information on budget priorities, spending plans, and overall fiscal strategy will be important for investors to understand the government’s approach. 

Confidence in the markets and the willingness of international funds to return will largely depend on the clarity of the new finance ministry’s policies and its ability to manage economic risks effectively.

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Sources:

CNBC

Reuters