President Prabowo Subianto abruptly removed Purbaya as finance minister on Monday and named his deputy, Suahasil Nazara, to the top finance job, in a move that surprised markets, but was also seen as an attempt to restore trust in fiscal policies.

After a terse handover ceremony at the finance ministry, Purbaya told reporters he found out about his termination in a phone call with the president's spokesperson Prasetyo Hadi on Monday.

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Purbaya was seen receiving a phone call and leaving in the middle of a parliamentary meeting just hours before Suahasil was sworn in.

"Last night, going to sleep was difficult. I was upset, but now it's not too bad," Purbaya told reporters.

"Tonight I can sleep soundly," he said, adding he had half expected to be fired over a recent decision he took. He did not elaborate.

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While he said he had no policy disagreement with the president, Purbaya suggested his ouster partly had to do with differences with his subordinates in the Finance Ministry. He was referring to the recent major shakeups in the tax, customs and excise offices which involved 300 officials.  

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Prabowo's sacking of Purbaya came just days after the former economist marked one year as finance minister, with Southeast Asia's largest economy suffering a crisis of confidence among investors and analysts.

Prabowo's fiscal policies have been under scrutiny since he came to power in October 2024 because of costly campaign promises.

Known for his candor, Purbaya's tenure was marked by the fastest economic growth in three years, but also the widest budget deficit in over twenty years outside of the pandemic, and credit rating outlook downgrades by ratings agencies Fitch and Moody's.

Capital outflows have also intensified this year, pushing the rupiah to an all-time low, triggered by concerns about fiscal profligacy, central bank interference and transparency issues in capital markets, on top of global risk aversion due to the war in the Middle East.

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Purbaya said his tenure was "decent", citing rising economic growth. He said he would spend his retirement fishing in a pond at the back of his house.

Speaking at the handover ceremony, Suahasil asked all stakeholders to open their doors for collaboration. He has pledged to safeguard Indonesia's fiscal credibility and abide by the legislated fiscal deficit limit of 3% of GDP.

A veteran technocrat, Suahasil, 55, is well known to investors and analysts, some of whom said he would likely reassure investors.

Shinta Kamdani, who chairs business group Indonesia's Employers Association, said Suahasil should provide policy continuity and institutional understanding.

"We hope this continuity will help ensure that the leadership transition does not lead to a sudden shift in policy direction," she said.

Kamdani said the business community understood the importance of a healthy budget and its limited fiscal space, but government support to bolster growth remained important to maintain purchasing power, boost investment and increase the nation's productivity.

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