Indonesia's president appoints Prabowo's nephew as deputy finance minister

By Stefanno Sulaiman and Gayatri Suroyo

JAKARTA (Reuters) - Indonesia's outgoing leader Joko Widodo swore in on Thursday as a deputy finance minister Thomas Djiwandono, nephew of President-elect Prabowo Subianto and his adviser for fiscal issues, to help the government handover.

Djiwandono will work with Widodo's finance minister, Sri Mulyani Indrawati, who has won plaudits for prudent fiscal policy including during the COVID-19 pandemic.

The appointment was intended "to smooth the transition of government from the administration of Mr. Jokowi to Mr. Prabowo," a senior politician from Prabowo's Gerindra political party, Sufmi Dasco Ahmad, told Reuters, using the president's nickname.

"The addition of Thomas will make it much easier to communicate," Sri Mulyani said in a joint press conference with Djiwandono.

Prabowo, 72, won February's election by a huge margin and is set to take over from Widodo in October, but his pick for finance minister and fiscal plans face investor scrutiny due to costly promises including a plan for free school meals in a nation of 270 million people.

The rupiah fell as much as 0.4% against the U.S. dollar on Thursday, the biggest drop among emerging Asian currencies, prompting the central bank to intervene to shore up confidence.

Concerns that debt may rise during Prabowo's upcoming administration had previously added to pressure on the rupiah and Indonesian bond prices.

DJIWANDONO RULES OUT BEING FINANCE BOSS

Djiwandono said he will not be Prabowo's finance chief and that he was tasked with synchronising the next administration's plans with the 2025 budget being designed at the finance ministry.

"Mr. Prabowo is still considering professional candidates for the role of finance minister," he told Reuters.

Gerindra's Dasco said Djiwandono will remain deputy finance minister when Prabowo's term officially starts in October.

U.S.-educated Djiwandono is Prabowo's main spokesperson on fiscal issues, often reiterating the incoming president's commitment to fiscal rules and keeping the 2025 budget deficit under the legal limit of 3% of gross domestic product.

Djiwandono previously worked in a securities firm in Hong Kong and for the Arsari Group, an Indonesian conglomerate led by Prabowo's brother Hashim Djojohadikusumo, according to his profile on the official Gerindra party website.

Djiwandono also serves as the party's chief treasurer.

"We hope Djiwandono's appointment will lead to better communication on fiscal synergy and the programmes proposed during the campaign can be implemented in a prudent manner ... according to our fiscal conditions," said Myrdal Gunarto, an economist with Maybank Indonesia.

The appointment should have a neutral impact on markets as there has been no change in the fiscal numbers, he said, adding that the rupiah's drop was likely due to external factors.

Widodo also appointed a senior Gerindra politician, Sudaryono, as a deputy agriculture minister.

(Reporting by Gayatri Suroyo, Stefanno Sulaiman and Ananda Teresia; Editing by John Mair, Michael Perry and Tom Hogue)