(June 5): Indonesian Finance Minister Purbaya Yudhi Sadewa denied he is resigning from office, after rumours of his departure swept through slumping markets this week.
It’s not true, Purbaya told reporters late Thursday, Bloomberg Technoz reported. State Secretary Prasetyo Hadi also separately told reporters late Thursday that Purbaya is not departing.
“If anything, now is the time for tighter coordination” between the Finance Ministry, Bank Indonesia, Financial Services Authority and Coordinating Ministry for Economic Affairs, Hadi said.
Purbaya is scheduled to hold a monthly briefing on the state budget at 1.30pm in Jakarta on Friday. The rupiah and bonds were steady while stocks slid as much as 2% in early trading Friday.
Talk of Purbaya’s possible departure spread fast on Thursday amid deepening concerns about the country’s economy and a graft probe involving President Prabowo Subianto’s US$15 billion ($19.28 billion) food programme. The benchmark stock index is the worst performer this year among more than 90 global gauges tracked by Bloomberg, and the rupiah this week weakened beyond 18,000 per dollar.
Other sources of uncertainty include the government’s rollout of a new export control plan and the detention of two members of President Prabowo Subianto’s cabinet. The rumour of Purbaya’s departure was exacerbated when a local news outlet accidentally published — and subsequently took down — a statement from 2013 about a finance minister change.
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Purbaya became finance minister in September after Prabowo ousted investor-favourite Sri Mulyani Indrawati in the wake of cost-of-living protests. He vowed to turbocharge Indonesian economic growth, which accelerated to 5.6% in the first quarter, though some economists are skeptical about the data.
His tenure has also seen him publicly rebuke a Citigroup Inc economist for lacking a doctorate, while Moody’s Ratings and Fitch Ratings have both changed the outlook on the country’s credit score to negative. Other investor concerns include an ongoing MSCI Inc review of the country’s investability, and the potential breach of fiscal deficit limits due to expensive plans like the free meals programme.
In an interview with Bloomberg News in April, the finance minister sought to offer assurances to investors worried about the Indonesian economy, where the subsidy bill has risen as a result of surging global energy prices.
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Purbaya described talk of his departure as a “rumour”, according to Bloomberg Technoz, a partnership between Mayapada Group’s PT Berita Mediatama Indonesia and Bloomberg Media Group, a division of Bloomberg LP, the parent of Bloomberg News.
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