Indonesian Minister’s Sudden Exit Sparks Alarm for Global Funds
The removal of Sri Mulyani Indrawati, a finance ministry veteran and an advocate for fiscal stability, risks raising market volatility.
Sri Mulyani Indrawati was removed from the finance minister post on Sept. 8.
Photographer: Ting Shen/BloombergThe sudden removal of Sri Mulyani Indrawati as Indonesia’s finance minister is bound to rattle global investors, who saw her as a voice of fiscal responsibility in an administration pushing for bigger spending.
Even before the late Monday announcement, rumors that Indrawati might resign had weighed on markets. Investors feared her departure would jeopardize Indonesia's hard-fought efforts to build credibility around its budget target. Fund managers weren’t shy to say Indrawati was why they put money in Southeast Asia’s biggest economy. And with the abrupt announcement that Indrawati has been replaced by the lesser-known Purbaya Yudhi Sadewa, markets face heightened volatility.