Key Facts
• On September 9, Purbaya was appointed as Indonesia’s new finance minister.
• Purbaya pledged to ease financial market liquidity in collaboration with the central bank.
• The finance minister aims to keep the fiscal deficit below 3% of GDP.
• Jakarta’s composite stock index fell 1.8% on September 9, with bonds also declining.
• The Indonesian rupiah dropped 1% against the US dollar; the central bank intervened in forex markets.
• Nationwide protests began in late August, initially targeting lawmakers’ allowances.
• Protests expanded to include grievances over government spending and police violence.
• On September 9, hundreds of students held peaceful demonstrations outside Jakarta’s parliament.
• Protesters demanded the release of detained participants from earlier demonstrations.
Summary
Indonesia’s newly appointed finance minister, Purbaya, announced plans to ease financial market liquidity in collaboration with the central bank to support economic activities and government programs. He emphasized adherence to fiscal rules, aiming to keep the fiscal deficit below 3% of GDP. Despite these measures, market confidence wavered, with Jakarta’s stock index dropping 1.8% and the rupiah falling 1% against the US dollar. The central bank intervened to stabilize the currency. Meanwhile, nationwide protests, which began in August over lawmakers’ allowances, have grown to include broader dissatisfaction with government spending and police misconduct. On September 9, peaceful demonstrations by students in Jakarta called for the release of detained protesters. The government faces mounting pressure to address both economic and social challenges.
