On 8 September 2025, Indonesia's president replaced the finance minister Sri Mulyani, widely regarded by investors as a guardian of fiscal discipline, with Purbaya Yudhi Sadewa.
Four days later the new minister placed Rp200 trillion of government cash in five state banks as on-call deposits, at 80.476% of the central bank's policy rate, on condition that the banks not use it to buy government bonds. The aim was to increase lending.
For anyone holding Indonesian assets, or rupiah, or costs priced in dollars, the question is not whether this particular policy works. It is what a change of regime does to the discount rate you should apply to everything else.
A country's policy framework is part of every asset in it. When the framework changes, the price of risk changes before the earnings do.
A year of signals
The September change did not arrive alone. Over the preceding months:
- January 2025. Pegadaian became Indonesia's first bullion bank, and gold became a mass-market product intermediated by regulated banks.
- 24 February 2025. The Danantara sovereign wealth fund launched, to manage state assets described as exceeding US$900 billion, with an initial investment budget of US$20 billion.
- 18 March 2025. The stock exchange halted trading for about 30 minutes after the Jakarta Composite fell more than 5%.
- 8 April 2025. After the US tariff announcements the index closed down about 8.5%, its lowest since June 2021.
- Late August 2025. Protests over lawmakers' housing allowances moved markets. On one day the index fell 1.73%, and the rupiah traded at about 16,490 per dollar on 29 August, with foreign net outflows from Indonesian equities reported at Rp29.41 trillion for the year to that point. Gold rose during the unrest.
- 8 and 12 September 2025. The finance minister was replaced, and the Rp200 trillion placement followed.
None of these is a verdict. Together they show a market where policy, politics and governance are moving variables.
How a household should think about it
You cannot forecast a minister's decisions. You can decide how much of your wealth should depend on them.
Country risk is part of the required return. In standard valuation, the cost of equity for a company in a country includes a premium for country-level risk: political stability, policy credibility, currency convertibility. When policy credibility is questioned, the premium rises and prices adjust.
Currency and policy move together. A shift towards looser fiscal policy raises inflation and depreciation concerns, which can weaken the currency. Households with dollar costs, such as tuition, travel and imported goods, are affected without owning a single Indonesian asset.
Diversify across jurisdictions, not only assets. Holding five Indonesian stocks and a rupiah deposit is one bet on one policy regime. Sound diversification counts exposure to common factors, and a national policy framework is one.
Know what your hedge is. Gold, dollars and foreign assets are all ways to hold something outside the domestic regime. Each has costs and risks: gold has no yield and can be volatile, dollar holdings carry the currency view, offshore assets bring cross-border reporting duties.
Practical implications
- Split your balance sheet by country, including the country your income comes from, your property, your savings and your investments.
- Decide a range for domestic exposure as a share of net worth, and review it when policy regimes change, not only when prices do.
- Match currency to need. Spending abroad should be backed by assets in that currency, or hedged.
- Hold part of your savings outside the domestic system if your plan depends on it, with the reporting that goes with it. See the border stopped protecting your income.
- Do not trade the headline. A change of minister is information. It is not an instruction.
Update, October 2026: what the following year added
The questions raised in September 2025 became ratings and index events. Moody's moved Indonesia's sovereign outlook to negative in February 2026, citing among other things the governance of Danantara, and Fitch followed on 4 March 2026. In late January 2026 the index provider MSCI flagged transparency and free-float concerns, and the Jakarta Composite fell more than 11.5% in two days. The rupiah hit a record low of about 17,706 per dollar on 20 May 2026, Bank Indonesia raised its policy rate to 5.25% and then 5.50%, and it held at 5.75% on 23 September. Of the Rp200 trillion placed in banks, Rp112.4 trillion had been lent by the end of September 2025. Gold, meanwhile, went from Rp1.52 million per gram on 2 January 2025 to Rp2.50 million on 31 December 2025, according to one report.
What we could not confirm
The body of this post reflects what was known on 16 September 2025; later developments are in the update section. Several details, including the August 2025 market moves and the Danantara asset figure, come from search summaries and secondary reporting because some primary pages could not be opened. We make no claim about whether the September 2025 policy was right or wrong. This is education, not investment advice.
Sources
- US News, Indonesia replaces respected finance minister (8 September 2025); ANTARA, Indonesia injects Rp200 trillion into five state banks (September 2025)
- Malay Mail, Prabowo launches Danantara (24 February 2025)
- Xinhua, Indonesia trading halt (18 March 2025)
- Jakarta Globe, Jakarta protests send Indonesian stocks down 1.7%; Katadata (29 August 2025)
- Jakarta Globe, After palm oil and nickel, Indonesia discovers a new pillar in gold
- Bloomberg, Fitch lowers Indonesia's rating outlook to negative (4 March 2026); Tempo English, IHSG plunge explained; ANTARA, Bank Indonesia raises rate to defend rupiah (9 June 2026)