09.09.202503:40:38UTC+00Rupiah Weakens as Market Reels from Finance Minister Shake-Up

On Tuesday morning, the Indonesian rupiah experienced a decline, reaching approximately 16,480 per dollar, before experiencing a modest recovery. This upturn followed the central bank's announcement of its intervention in the market to stabilize the currency. The pressure on Indonesian assets escalated after the unexpected dismissal of Finance Minister Sri Mulyani Indrawati on Monday. Her removal unsettled investors, given her reputation for fiscal responsibility and international credibility. This development compounded the political and economic uncertainty already heightened by recent large-scale anti-government protests. Purbaya Yudhi Sadewa, the newly appointed finance minister, has committed to protecting Indonesia's fiscal stability, yet market sentiment remains wary. Thus far in the year, the rupiah has depreciated by 2.3% against the US dollar, ranking it as the second least performing currency in Asia after the Indian rupee. Concurrently, the dollar index stabilized at 97.4, its weakest level in nearly seven weeks, as weak U.S. labor data spurred expectations of approaching Federal Reserve rate cuts.